What is Proof of Stake
Proof of stake is a category of consensus algorithms for public blockchains, which Ethereum’s upcoming Casper algorithm is a part of. It serves a similar function to the proof of work which underpins the security behind Bitcoin, the current version of Ethereum and many other blockchains, but has significant advantages in terms of security and energy efficiency.
In general, a proof of stake algorithm looks as follows. The blockchain keeps track of a set of validators, and anyone who holds the blockchain’s base cryptocurrency (in Ethereum’s case, ether) can become a validator by sending a special type of transaction that locks up their ether into a deposit. The process of creating and agreeing to new blocks is then done through a consensus algorithm that all current validators can participate in.
There are many kinds of consensus algorithms, and many ways to assign rewards to validators who participate
Original URL: http://feedproxy.google.com/~r/feedsapi/BwPx/~3/qnZfPpp-djU/Proof-of-Stake-FAQ