Proof-of-stake is a term that crops up a lot in crypto. While it’s a complex topic, it’s definitely a subject to understand in-depth before diving into the world of blockchain.
What Is Proof-of-Stake?
Proof-of-stake is the mechanism used by some of the world’s most popular cryptocurrencies to secure their networks. Not only is it more energy-efficient, but it gives average token holders the opportunity to earn more from their crypto assets.
Proof-of-stake is used to secure blockchain networks through a consensus mechanism. The role of consensus mechanisms is to verify transactions to ensure the security of the blockchain is intact. In contrast to proof-of-work mechanisms that use computational power to secure the blockchain, proof-of-stake uses validators.
A validator’s role is to ensure transactions made on the blockchain are legitimate. This is done by locking up, or staking, crypto. If the transactions are approved by the validator, a new…