Proof of stake (PoS) is a consensus mechanism used in blockchains to process transactions and create new blocks. It is a way to decide which user or users validate new blocks of transactions. PoS protocols work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. Validators are required to “stake” some of their cryptocurrency as collateral, which is then locked up in a deposit. The exact definition of "stake" varies from implementation to implementation. PoS reduces the amount of computational work needed to verify blocks and transactions compared to proof of work (PoW). Under PoW, hefty computing requirements kept the blockchain secure, but PoS changes the way blocks are verified using the machines of coin owners, so there doesnt need to be as much computational work done.

Validators are rewarded with cryptocurrency for every correct validation, and they offer their coins as collateral—staking—for the chance to validate blocks and earn rewards. If a validator adds a transaction to the blockchain that other validators deem to be invalid, they can lose a portion of what they staked. PoS is designed to reduce network congestion and address environmental sustainability concerns surrounding PoW. PoS is seen as an upgrade from PoW because it is faster, sidesteps the energy burn, and requires no special computing equipment.

PoS is a mechanism used to verify blockchain transactions, and it differs from PoW in that it uses randomly selected validators to confirm transactions and create new blocks. PoS is more decentralized than PoW, and economies of scale do not apply in the same way that they do for PoW mining. However, PoS is younger and less battle-tested compared to PoW, and it is more complex to implement than PoW. Validators share the task of validating transactions, and there are currently no certificates issued. Users can participate in staking by joining a staking pool run by someone else and earn rewards.