What is Proof of Stake?

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.