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What is Proof of Stake (PoS)?

Crypto Terms Glossary: What is Proof of Stake (PoS)?

Proof of Stake (PoS) is emerging as one of the most widely used blockchain consensus mechanisms in existence. PoS networks incentivize participants to stake native coins in a network of validator nodes. Upon the close of a transaction block, validator nodes are eligible to be randomly chosen to validate block data, thus generating the subsequent block, and earning native coins as a reward. A robust nodal network offers increased network security, resiliency, and computational power. Proof-of-Stake systems also generally enable validator nodes to contribute democratically in decentralized platform governance through voting on key updates and decisions. While still a recent innovation, PoS networks are already proving they can be faster and more scalable than Proof-of-Work (PoW) blockchains, in addition to being more energy efficient.

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