Mastering Blockchain - Second Edition

Proof of Stake (PoS)

This proof is also called virtual mining. This is another type of mining puzzle that has been proposed as an alternative to traditional PoW schemes. It was first proposed in Peercoin in August 2012. In this scheme, the idea is that users are required to demonstrate possession of a certain amount of currency (coins) thus proving that they have a stake in the coin. The simplest form of the stake is where mining is made comparatively easier for those users who demonstrably own larger amounts of digital currency. The benefits of this scheme are twofold; first acquiring large amounts of digital currency is relatively difficult as compared to buying high-end ASIC devices and second it results in saving computational resources. ...