Proof-of-stake (PoS)

Proof-of-stake (PoS) is a consensus mechanism used in blockchain networks for verifying transactions and creating new blocks on the blockchain. In contrast to proof-of-work (PoW) where participants need to perform computational "work" to solve mathematical puzzles to confirm transactions and add new blocks to the blockchain, PoS relies on validators who "stake" their own cryptocurrency as collateral to verify transactions. PoS allows network participants to earn rewards for verifying transactions and securing the network while avoiding the high energy consumption associated with PoW. In a PoS system, validators who hold more cryptocurrency have a higher chance of being chosen to validate the next block and earn rewards. This incentivizes validators to act in the best interest of the network and maintain its security and stability. PoS systems are used in many blockchain networks like Ethereum, Cardano, and Polkadot.