In the world of decentralized networks, though there isn’t any one single authority controlling the network, there is still a requirement for the controllers to take charge of the operations on the chain, and/or to validate the transactions. To solve this issue, the concept of a consensus mechanism was developed.
Technically, the consensus mechanism is the way by which the nodes - the computers on the blockchain validate the transactions happening on the chain. There are different types of consensus mechanisms available to be implemented on various such as Proof of Work, Proof of stake, etc. Here, we will be learning all about Proof of Stake
If you haven’t already, read our article about What are some popular consensus mechanisms?
Proof of Stake is regarded as an updated version to validate transactions that came into existence to solve the disadvantages offered by Proof of Work. Developers on the network, especially the Ethereum network which is more than just about transactions, realized very early that it would be difficult to scale and sustain while using PoW. Hence, proof of stake was introduced.
In this mechanism, the miners, who are called validators here get a chance to stake their native cryptocurrency on the network and in return get a chance to win and validate a transaction. The validator is selected on the basis of
The network aims to reward validators who have been invested for a long.
All participating validators receive a reward in the native cryptocurrency, which is generally distributed by the network in proportion to each validator’s stake.
The minimum amount of crypto that validators are required to stake is often relatively high (for ETH2, for example, it’s 32 ETH) and validators can lose some of their stakes via a process called slashing if their node goes offline or if they validate a “bad” block of transactions.
List of networks using Proof of Stake
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