Acronym for Proof of Stake. A consensus algorithm used to process transactions on the blockchain by giving miners (known as validators in PoS) with more wealth of a specific coin (stakes) more controls on the network.
A group of validators takes turns proposing and voting on the next block, and the weight of each validator’s vote depends on the size of its stake. When the validators discover a block that they think can be added to the blockchain, they will validate it by placing a bet on it. The validators will get a reward proportionate to their bets. Anyone who holds the blockchain’s base cryptocurrency can become a validator by sending a special type of transaction to lock up their fund.
Some of the key advantages that PoS has over Proof of Work (PoW) are lower energy consumption, a more environmentally friendly system and a more scalable blockchain with higher transaction throughput.