What is the Proof-of-stake methodology

Apr 02, 2022
Proof-of-stake is a methodology used by blockchain networks to achieve distributed consensus.

At the Proof-of-work methodology, miners are validators of the blockchain network, spending significant computing power and electricity on this. While at Proof-of-stake the validators prove their work in the network at the expense of their own capital in the format of holding coins with a smart contract of the native network. The validator is responsible for verifying the validity of new network blocks distributed over the network, as well as for creating and distributing the new blocks themselves.

The withheld funds are a kind of collateral that can be burned if the validator has questions about non-compliance with the consensus of the blockchain network. When depositing collateral, a new user enters the account activation queue, which limits the number of new staking network validators. After passing the activation stage, validators receive new blocks from peers in the native network. Transactions and signatures in the created blocks are checked in order to validate the validity of the block. And then the validator sends its confirmation in favor of the verified network block.

The Proof-of-stake methodology contains a number of important differences from Proof-of-work, such as: improved energy efficiency due to the absence of the need to spend a significant amount of energy on computing, reduced hardware requirements and no risk of centralization of the blockchain network.