Think of Proof-of-Stake as a way to keep a cryptocurrency network secure and running smoothly.
Here’s how it works:
- No More Mining: Unlike Bitcoin, which uses energy-hungry “mining“, PoS networks rely on something else.
- Validators, Not Miners: People who want to help the network lock up a certain amount of the cryptocurrency. These people are called “validators”.
- Chosen at Random: The network randomly chooses validators to create new blocks of transactions. The more crypto you stake (lock up), the higher your chances of being chosen.
- Earning Rewards: Validators who are chosen get rewarded with new coins.
Why Proof-of-Stake Matters?
- Energy Efficient: PoS uses way less energy than older systems like Bitcoin’s Proof-of-Work.
- More Accessible: You don’t need expensive mining equipment to participate, just some of the cryptocurrency itself.
- Still Secure: PoS systems are designed to be just as secure (if not more so) than traditional proof-of-work systems.
Examples of PoS Cryptocurrencies
- Ethereum (After the Merge in 2022)
- Cardano (ADA)
- Solana (SOL)
- And many more!
Want to learn more or start staking?
