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Proof of Stake is a cryptocurrency infrastructure algorithm like PoW . In PoS, coins are produced when the system is

What is Proof of Stake?

What is Proof of Stake?

What is PoS Algorithm? How does it work? What are the types?

 Proof of Stake is a cryptocurrency infrastructure algorithm like PoW . In PoS, coins are produced when the system is started and sent to wallets at certain intervals according to everyone’s investment. It is an algorithm method that you have as much power as the number of coins you have.

Mining, called mining, is required to increase your strength in Proof of Work . In this, you need to increase the number of devices you are mining or renew these devices with more powerful ones. In Proof of Stake , you only need to buy more than the related coin.

Bitcoin ‘s system is  designed according to the Proof of Work (PoW) algorithm. Proof of Work  technology brings additional electrical energy and hardware costs with high calculations.

In Proof of Stake  system, verification is done randomly depending on the amount of coins in the wallet account of the persons. So every wallet that owns Coin is also a verifier. Of course, the possibility of using a large amount of system code as authenticators keep account is higher, and thus each  transfer verification (transaction) will receive a greater share of processing.

The first Proof of Stake (PoS) coin is  Peercoin . There are different types of Proof of Stake .

What are the Types of Proof of Stake?

  • The first of the PoS  types offers a certain annual rate of  interest  . In such  PoS coins , when you synchronize  your wallet  , you earn some coins  in the time elapsed  ( Stake ). As an advantage of this type, users  often synchronize their wallets to stake  . In this way, the  network is strong  and the coin does not die even if the number of active users decreases. In addition, investors may choose to stake to  get their interest instead of selling the coin  . This prevents the coin from falling to a certain extent.
  • In the second type,  there is no interest  and the maximum  number of coins is kept constant . In such coins, your wallet must be constantly active and you must forge the coins  you  have. The advantage of this system is that because there are people who want to constantly forge, the system will be very powerful and transfer will take place in a very short time. Since the number of coins is kept constant, it is not defeated to  Inflation . In the long run, the coin does  not lose value .

He plans to leave Proof of Work on Ethereum , the  second largest coin in the world, following Bitcoin,  and  switch to the PoS  algorithm in  2018 

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