Proof Of Stake (PoS)
Proof of Stake aims to resolve the setbacks evident in the case of Proof-of-Work, with renowned examples such as Ethereum leading the change by shifting away from Proof-of-Work. The following discussion offers a detailed impression of Proof of Stake fundamentals alongside insights on how does proof of stake work. Let us learn about Proof of Stake comprehensively.
Now that you have a proven consensus mechanism like Proof-of-Work offering the assurance of better security, is it reasonable to wonder about an alternative? So, what is Proof of Stake in blockchain? The answer basically implies that it is a variant of the consensus mechanism used in blockchain networks for achieving distributed consensus. Participants in a blockchain network stake their assets in the protocol for ensuring their selection of validators.
Now, validators are the network participants who would propose and validate the blocks on a Proof-of-Stake blockchain. Participants with stakes in the network would be selected randomly as validators depending on their stake. Validators have to attest to the blocks they have verified, and with an adequate number of attestations for a block, it can be added to the blockchain. The validators receive rewards for proposing blocks and validating them successfully.
The definition of PoS blockchains clearly establishes a valid case for shifting to a new consensus mechanism. Proof of Stake is different from Proof-of-Work consensus mechanisms in the basic approach. For example, you have to rely on stakes in the blockchain network as compared to computational power for adding blocks in Proof of Stake. Therefore, you can clearly notice the independence from the need to maintain expensive computing hardware with Proof of Stake.
Unlike Proof of Work, you don’t have any significant entry barriers for running a validator node on Proof-of-Stake blockchains. Furthermore, Proof of Stake blockchains also offer better levels of decentralization at the node level in comparison to PoW networks. On top of it, Proof of Stake also allows better prospects than Proof of Work for scalability through improved ease of implementing scalability solutions such as sharding.
You can develop your understanding of “what is Proof of Stake in blockchain” further by reflecting on the components in working Proof of Stake. One of the foremost highlights of Proof of Stake refers to the freedom from mining. Validators do not require a massive amount of computational power due to the lack of competition among them.
On top of it, validators do not need computational power for mining blocks. On the other hand, validators have to generate blocks when they are selected. Even if validators are not selected, they would have to validate the proposed blocks in a process called attesting. Validators receive the rewards for offering proposals for new blocks alongside attesting to blocks they have reviewed.