Proof of Stake (Pos), also known as proof of stake, is a fairly common term in the cryptocurrency market in particular and the Blockchain space in general, with new people it is quite difficult to be able to. understand what PoS is and how it works. This article will explore with you what is Proof of Stake? As well as the operation and advantages and disadvantages of this algorithm.

Proof of Stake, also known as proof of stake, is a fairly common term in the cryptocurrency market in particular and the Blockchain space in general, for newcomers it is quite difficult to understand what PoS is. How this works, how does PoS work? This article will show you what Proof of Stake is. As well as the operation and advantages and disadvantages of this algorithm.

So what is Proof of Stake?

Proof of Stake is another way of authenticating the basis of transactions and reaching a consensus-dispersed threshold. The actual PoS is still a protocol with the same purpose as some other algorithms but the process to achieve the goal is completely different. This algorithm only occurs when a miner contributes a stake in a specific digital currency to verify the block. This is quite simple for a computer because you only need to prove you own a share of the digital currency. In addition, PoS is a public system for everyone to become a miner. Irrespective of small or large, the mining scale will be linearly proportional to the number of shares owned.

How does Proof of Stake work?

A new consensus method for packaging blocks into chains has been introduced by PoS. Of all participating nodes, a node will be randomly selected to test and package the block. The participating nodes are called validators, who need to put some money into the network in order to participate, Ethereum’s Vitalik Buterin called bet. I can understand this is a way to prove identity – deposit money. The deposit is also known as the Stake. The system locks this amount. And the system will unlock after the node has not participated in the validator for a while, not immediately. The selected validator will execute the validate block. This action is called forge or mint. If the block is valid and written to the chain, this validator will receive a reward from the transaction fee.

Advantages of PoS

• First, you will increase the amount of coins during the holding period. Instead of keeping the coins on the floor, you will not have any more coins. So even if the price drops, you can still profit a little, because of the number of your coins.

• The second is that mining without a machine has a terrible configuration, just need a computer with corn stamina to install fiber optic internet on 24/24, you can dig.

• The cost is very cheap and especially if you do not want to dig anymore, move the coin to the floor and sell it is done.

• Stake is absolutely secure because the wallet has a backup. Huge profits with some coins. However many coins only have 10% per year.

• The proof-of-stake coin lines are becoming a new trend after the Trending ICO has passed. According to the information, ETH will soon have PoS, so follow the trend to earn more coins.

Cons of PoS

• The interest is only an estimate and at staking it will not reach that level.

• Staking is not always profitable if the Stake rate is lower than the coin’s inflation rate, you will lose.