Proof of Stake (PoS)

Proof-of-stake (PoS) is an algorithm for reaching a consensus that requires validators to stake a certain amount of assets. This is a requirement in order to have a chance to verify transactions and earn rewards. Every blockchain network has a minimum token requirement to be a validator. For example, Ethereum requires staking 32 ETH. The Proof-of-stake consensus mechanism does not need miners.

This consensus mechanism has better scalability than Proof-of-Work (PoW) and does not require sizeable electrical energy so it is more environmentally friendly. However, this system comes at the expense of decentralization and its security has not been tested in the long term. Examples of crypto assets with PoS are Solana, Ethereum, Near Protocol, and Avalanche.