Proof of Stake (PoS) is a consensus mechanism used by some blockchain networks as an alternative to Proof of Work (PoW). In a PoS system, the probability of a user being chosen to validate the next block is based on how many coins they hold and are willing to “stake” as collateral, rather than on their ability to solve complex puzzles. This method significantly reduces the amount of computational power and energy required, making it more environmentally friendly than PoW.

PoS mechanisms encourage holding coins to support the network’s security and operations. Networks like Ethereum 2.0 have adopted PoS to improve scalability and reduce energy consumption. PoS also mitigates the risk of centralization seen in PoW systems, where mining power is concentrated among those with significant computational resources.

“By staking my coins in a PoS blockchain, I played a part in validating transactions and maintaining the network’s security, all while earning rewards based on the amount of my stake.