Blockchain 101: Your Easiest Guide to Proof of Stake Consensus Mechanism

Intermediate Apr 7, 2023

The Beginner’s Guide to the Proof-of-Stake

What Is Proof of Stake (PoS) in Crypto?

Proof Of Stake (PoS) in crypto is among the several consensus mechanisms used by blockchain networks to achieve a distributed consensus. Consensus mechanisms, moreover, are what we call the stack of protocols that allows a network of nodes to agree on the blockchain’s performance, as well as incentivize these nodes ensuring the efficiency of the network.

Furthermore, while Bitcoin uses the Proof of Work mechanism, Ethereum, on the other hand, uses the Proof of Stake mechanism. 

The Proof-of-Stake consensus mechanism is where validators stake capital (ETH) into a smart contract in the Ethereum blockchain. The validators are responsible for the proposal and validation of blocks in a Proof of Stake blockchain. Moreover, these participants with stakes are selected randomly as validators, depending on how much they have staked. These validators should ensure to attest that the blocks are verified. Only with adequate attestations would a block be added to the blockchain. Afterward, the validators receive rewards for these crucial tasks.

Furthermore, in Proof of Stake mechanism, offers a better node level of decentralization compared to the Proof of Work mechanism. What’s more, it gives improved scalability solutions like sharding.

Importance of Proof of Stake

One of the key highlights of the Proof of Stake mechanism is its freedom from mining. In this consensus, validators do not need an immense amount of computational power when mining blocks. 

Also, it gives validators the task to generate blocks when selected and even if they are not selected, they can validate the proposed blocks—attesting—and still receive rewards for this task.

Issues with Proof of Stake

Some find the Proof of Stake consensus a bit new and less battle-tested compared to its predecessor, Proof of Work.

Also, trailers find the Proof of Stake more complex to implement. Users even need to run three (3) pieces of software to participate in the Ethereum Proof of Stake consensus.

Cryptocurrencies Using Proof of Stake

Furthermore, when a cryptocurrency uses the Proof of Stake mechanism, they use staking rather than mining. 

Some of the major cryptocurrencies using the PoS consensus are:

  • Ethereum
  • Cardano
  • Solana
  • Polkadot


Nonetheless, the PoS consensus algorithm has had a significant impact on how we view cryptocurrencies today.

With that said, stay tuned to learn more about everything blockchain!