Proof Of Stake (POS)

Proof of Stake is a verification system like mining. Its biggest difference from POW (Proof Of Work) is that POS doesn’t need mining equipment. In the system of POS, coins are created while the system starts. The algorithm works in direct proportion to the coin that you have. If you have more coins that means you have more earning power. The one who has the most coin has the right of the transaction priority.

Unlike Proof of Work, the Proof of Stake protocol does not require its users to solve a complex mathematical problem or spend a lot of energy. Users who want to take part in adding new blocks to the chain in the Proof of Stake protocol lock a certain amount of crypto money into the network of the cryptocurrency they use. In the PoS protocol, users who lock cryptocurrencies to the network and take part in the approval of new blocks are called "Validators".

The cryptocurrencies that the validators lock into the network serve as a guarantee for the work they will do. The PoS protocol, like the PoW protocol, wants to see that users are doing a certain job or risking something before a new block is added to the network. In the PoS protocol, validating users risk the cryptocurrencies they have locked in the system.

Just as with the Proof of Work system, the risk of incorrect transactions being confirmed for the PoS system is much greater than the reward they can potentially earn. In the PoS system, it is thought that the system will work safely as long as the reward earned by the validating users per block is less than the amount of crypto money locked into the system.

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