What Is Proof of Stake?
Proof of Stake, a new consensus mechanism that aims to increase speed and efficiency and lower fees, has been created. Proof of Stake is a cost-saving mechanism that doesn’t require miners to solve complex math problems. This is a time-consuming and energy-intensive method. Instead, transactions can be validated by those who have invested in the blockchain through staking.
Staking is similar to mining in that it allows network participants to select the latest transactions and then earn crypto in exchange.
Project To Project
Although the exact details of each project’s implementations may vary, the gist is that users place their tokens on the line to get a chance at adding a block to the blockchain and receive a reward. The tokens they stake act as a guarantee that any transaction added to the blockchain is legitimate.
Validators, as they are commonly known, are selected by the network based on their stake size and how long they have held it. The most invested participants get rewarded. In what is called a slashing event, transactions in a new block that are found to be invalid can result in users having a portion of their stake burnt by the network.