FAQ 26 – What is Proof of Stake principle?
Appearance of proof of stake
The principle of Proof of Stake
The Proof of stake (PoS) principle was introduced in 2011 on the Bitcointalk forum. It was created as a solution to the Proof of Work issues, by removing the concept of mining.
Definition of Proof of Strake
The purpose of Proof of Stake is to process transactions and create new blocks in the blockchain.
It is made network of validators, who must stake coins to validate the blocks of the blockchain.
Thus, the principle of Proof of Stake consists in putting a part of the tokens at stake, i.e. one’s possessions, in order to validate a block.
Which cryptocurrencies use this principle?
The operation of Proof of Stake
There are different conditions to fulfill in this Proof of Stake principle:
– You have to hold cryptocurrency from the blockchain
– The validator selected has a limited time to mine, otherwise another validator is selected