Altcoins Talks - Cryptocurrency Forum
Learning & News => Further Education => For Beginners => Terminology => Topic started by: Mounty on July 01, 2018, 03:00:30 PM
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Proof of stake, is an alternative way to validate transactions, it was developed as a solution to the power hungry POW / proof of work.
It is considered a greener alternative to PoW. It requires holding of certain amount of coin/token to verify transactions on the Blockchain.
The process of mining a proof of stake coin is often referred to as Staking.
Most cryptocurrency including the first and largest one Bitcoin, use proof-of-work mining to secure the blockchain. This has proven to be very secure and effective, but has some drawbacks like expensive energy usage and the need for specialized mining computers. Proof of stake is an alternative method.
Where PoW requires to perform a certain amount of computational work, a proof of stake system requires only to show ownership of a certain amount of money, or stake of the coin/token.