@serendipity
8 months ago

How would you explain Proof of Stake (PoS) to a layman?

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Proof of stake is an alternative process for transaction verification on a blockchain. It is increasing in popularity and being adopted by several cryptocurrencies. To understand proof of stake, it is important to have a basic idea of proof of work. As of this writing, the proof of work method is used by Bitcoin, Ethereum and most other major cryptocurrencies.
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Proof of Stake -


Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins he or she holds. This means that the more Bitcoin or altcoin owned by a miner, the more mining power he or she has.

The first cryptocurrency to adopt the PoS method was Peercoin. Nxt, Blackcoin, and ShadowCoin soon followed suit.
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Proof-of-Stake algorithms achieve consensus by requiring users to stake an amount of their tokens so as to have a chance of being selected to validate blocks of transactions, and get rewarded for doing so.
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Proof of stake, the creator of a new block is chosen in a detreministic way, depending on its wealth, also defined as stake.
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Proof of Stake system validate transactions and achieve consensus without solving maths puzzle ( as done in proof of work). The maker of a new block is chosen in a deterministic way based on the maker’s stake. The stake is the number of digital coins. If one person were to stake five coins and another person staked 100 coins, the person staking 100 coins would be 20 times more likely to be chosen as the next new block validator.

In the Proof of Work system, a miner owns no coins and he is rewarded with a new coin. In a Proof of Stake system, a validator must own and support the existing coins he is verifying. These coins are created in the beginning and the validator is rewarded after each validation.
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Proof Of Stake - you keep your coins in your wallet while it's running and they give you free coins based on how many coins you hold.
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oof of stake is a different way to validate transactions based and achieve the distributed consensus.
It is still an algorithm, and the purpose is the same of the proof of work, but the process to reach the goal is quite different.
Proof of stake first idea was suggested on the bitcointalk forum back in 2011, but the first digital currency to use this method was Peercoin in 2012, together with ShadowCash, Nxt, BlackCoin, NuShares/NuBits, Qora and Nav Coin.
Unlike the proof-of-Work, where the algorithm rewards miners who solve mathematical problems with the goal of validating transactions and creating new blocks, with the proof of stake, the creator of a new block is chosen in a deterministic way, depending on its wealth, also defined as stake
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pos - people can stake coins in their wallet and validate block transactions and there by get rewards
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Proof of Stake is when you hold your coins your own node wallet and you are used to confirm transactions and for doing so you are randomly awarded with block rewards.
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It's closer to what our existing financial system currently operates on (or is supposed to operate on) than proof of work. In PoS those with the largest stakes, reap the biggest rewards as it relates to the issuance of new money.
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