What is Proof of Stake?

Published by Cyber Flows on

Proof of stake is another consensus algorithm used by cryptocurrencies to validate blocks.

Its purpose is the same as in the case of a proof of work, but the process to reach the goal is quite different. 

The creator of a new block is chosen in a deterministic way, depending on its wealth, also defined as stake. People who want to participate in the transaction confirmation “freeze” a certain amount of funds.

In exchange for the risk of losing them, the person who correctly confirmed the transaction receives a prize – a transaction fee. That’s why these people are called forgers instead of miners.

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