POS Consensus

Proof of Stake

Blockchain is not controlled by any authority, hence it is decentralized and not centralized. Therefore, there must be an approach to reach consensus on the legitimacy of crypto transactions. Otherwise, blockchains can suffer from undesirable outcomes, including double spending, and fraudulent transactions.

Blockchains with PoS consensus mechanisms require their nodes to "stake" or "lock" cryptocurrency for a certain period of time. In return, these nodes get the opportunity to become "validators," which are selected nodes that generate new blocks for the blockchain and receive the original cryptocurrency as a reward. The greater the amount of cryptocurrency staked, the greater the chance of being chosen as a validator. The PoS system has a framework that secures the network if validators start acting suspiciously or engage in fraudulent activity.