Proof-of-Stake

Proof of Stake (POS) is a system for the mining and validating blocks on a blockchain, based on the number of coins that a miner holds. It was created as an alternative to Proof-of-Work (POW), which is the original consensus algorithm in blockchain technology and which requires high amounts of electrical power.

A node is randomly selected to validate a block with a probability proportional to the number of coins it possesses. Such a node is called a stakeholder.