Proof of stake(PoS) is a type of blockchain consensus algorithm that relies on participants having an economic stake in the success of the network. Unlike proof-of-work (PoW) based systems/algorithms where the algorithm rewards participants who solve computationally expensive puzzles in order to validate transactions and create new blocks (i.e. mining), in PoS the creator of the next ledger update (eg a blockchain block) is chosen in a deterministic and pseudo-random way where the probability that an account is chosen depends on the accounts stake in the system (eg its wealth in a system).
Proof of stake has been contrasted to proof of work as virtual mining, simplified with the phrase "One coin, one vote" as compared to proof of work's "one cpu, one vote".
Naive proof of stake algorithms suffer from the nothing at stake problem. The nothing at stake problem is characterized by the incentive for network participants to contribute blocks to every potential blockchain fork to ensure they receive a block reward on the winning chain.
A number of blockchains have transitioned, or are in plans to transition from PoW to PoS. Ethereum for example plans on moving from a proof of work protocol using Ethash to a proof of stake consensus protocol utilizing Casper.
A variety of different types of proof of stake have been developed and implemented across blockchain networks.
"Coin age" proof of stake
Casper proof of stake
Delegated proof of stake (DPOS)
Bitshares, EOS, Lisk
Others & hybrid
PoS with Masternodes
Proof of stake velocity (POSV)
Random block selection
An advantage of proof of stake systems is the reduction in computational power required to maintain the system compared to proof of work.
The security and scalability properties of proof of stake mechanisms as compared to proof of work mechanisms continue to be debated in the blockchain community.
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Ouroboros: A Provably Secure Proof-of-Stake Blockchain Protocol
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Documentaries, videos and podcasts
Formal Barriers to Proof-of-Stake Protocols - BPASE '18
Jan 30, 2018
- EthereumEthereum is an open-source, public, distributed blockchain computing platform featuring smart contract (scripting) functionality, which facilitates online contractual agreements.
- Proof-of-work systemA proof-of-work (POW) system (or protocol, or function) is an economic measure to deter DOS attacks and other abuses (e.g. spam) on a network by requiring some work from the service requester, usually meaning processing time.
- BlockchainA blockchain is an append-only digital ledger storing a set of time-ordered transactions grouped in blocks that are linked together using cryptographic hashes.
- NXTNXT is a digital currency and decentralized platform for building applications and financial services.
- PeercoinBitcoin derivative cryptocurrency and the first cryptocurrency to implement the Proof of Stake consensus.
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