What is Proof-of-Stake (PoS)?


What is the Proof-of-Stake (PoS) consensus mechanism commonly used by many major blockchains?

This is a Guide on Proof-of-Stake.






What is Proof-of-Stake (PoS)?


In a previous article, we explained what a Consensus Mechanism is and I would recommend giving that a read if you don’t know what it is, as it will help you better understand this thread.



Proof-of-Stake is a consensus mechanism used for #cryptocurrencies which processes transactions and create new blocks within a blockchain. PoS will verify blocks using the computers of validators (token owners).

Validators must surrender their tokens as collateral to the network as staked tokens. For Example, the Fantom network requires users to Stake 3.175 million $FTM if they wish to become a Validator of the network.

For most PoS blockchains, users who aren’t validators can stake the native token of the network to specific validators. There are also various protocols like Lido DAO which offer liquid staking and allow users to stake, with no minimum requirements and help secure the network!


The main purpose of Proof-of-Stake is to drastically reduce network congestion, improve the speed and eliminate environmental issues that cloud Proof-of-Work. Majority of major blockchains now use PoS and also develop it in their own ways, eg. Sharding.

In another article, we will go through the Proof-of-Work (PoW) consensus mechanism which is used by the number one cryptocurrency in the world, Bitcoin.



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