Proof of Stake

Proof of Stake is the validating of transactions en the creating of blocks on the blockchain by 'staking' a certain crypto. This is a concensus mechanism.

In Proof of Stake there are no miners, but validators. They don`t mine blocks, but forge blocks.

The rewards you get for staking your coins are the transaction fees, from transactions in the block.

Proof of Stake Lottery

The chances of solving a block can be compared to lottery tickets. This usually depends on your 'stake'. Let`s say there are a 100 coins and you own 1 coin, you have a 1% chance to solve a block.

Delegation Mechanism

With special wallet software a user has the ability to 'delegate' their stake to another user. The more coins are delegated to one user, the higher the chances of solving blocks are for that user.

More blocks = more rewards and these rewards are shared among all the stakeholders in a proportion to the staked amount.

Pros and Cons

Pros

• Energy efficient
• Low entry barrier (You don`t need expensive equipment as in Proof of Work)
• PoS cryptocurrencies are generally faster than PoW cryptocurrencies

Cons

• Users with many coins can have a big influence on the consensus proces.