Proof of stake is an important concept for blockchain networks. This article will outline what consensus is, what staking is, defining proof of stake, and how it works. Let’s get started!
What is Consensus?
According to BlockGeeks.com, consensus is a group decision-making process where group members develop, free too, and support a decision in the best interest of the whole group.
The key to these networks is that they are not centralized. Meaning, each device in the network separately verifies a transaction. The network ensures all nodes work in harmony and must come to a consensus on which transactions are valid or not.
What is Staking?
Staking and mining are not the same things. Staking is an alternative to mining that requires fewer resources. According to Haruinvest, staking involves placing your cryptocurrency in a locked account in exchange for receiving rewards.
What is Proof Of Stake?
It is an important concept in crypto because it increases speed and efficiency while lowering costs. How it lowers cost is by lowering energy consumption by not requiring all miners to complete math problems. Meaning, these transactions are validated by people who are staked on the blockchain.
How Does It Work?
It does not use significant amounts of power because they are selected at random. They do not mine blocks, they actually create blocks when chosen. When they are not creating these blocks, they validate proposed blocks.
Staking is an important concept for blockchain networks. Proof of stake is much more environmentally friendly than proof of work and helps validate proposed blocks.
To learn more about proof of stake, check out a video Chris K. did about it here.
Rose is the lead editor for crypto current and she has a bachelor’s degree in business with a major in Marketing. Rose discovered her love for this field while traveling to 5 different countries across the globe for volunteer work. During her travels, she learned the importance of freedom and how cryptocurrency can offer a ton of opportunities for freedom. When she is not working you can catch her binge-watching tv, playing her Nintendo switch, or taking Korean lessons!
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