Proof of Stake (PoS)
A consensus mechanism in which the right to validate transactions depends on the amount of coins locked (staked), not computing power.
Proof of Stake (PoS) is a consensus mechanism in which the right to validate new blocks is granted to participants in proportion to the number of coins they have locked (staked) as collateral. Instead of computational competition as in Proof of Work, a validator risks losing part of their staked funds if they try to cheat the network.
PoS uses radically less energy than Proof of Work, and it is what Ethereum (since 2022) and most newer blockchains run on today. This mechanism is also the basis of staking, a way of earning on the cryptocurrency you hold.
Related terms
Proof of Work (PoW)
A consensus mechanism in which computers (miners) compete to solve cryptographic puzzles in order to validate a new block of transactions.
Staking
Locking up cryptocurrency you hold on a Proof of Stake network in exchange for rewards, usually paid in the same cryptocurrency.
Blockchain
A distributed, immutable ledger of transactions jointly maintained by many independent computers (nodes) in a network.