What is PoS used for?
PoS (Proof of Stake) is a newer consensus algorithm that operates based on token ownership. In PoS, network participants (validators) lock or "stake" their coins as collateral for the right to add a new block to the blockchain.
The more coins a participant stakes, the higher their chance of being selected to add the block.
Key purposes and functions of PoS:
🔵 Energy efficiency: Unlike PoW, PoS does not require extensive computational resources, making it more environmentally friendly and economically viable.
🔵 Increased security: In the event of malicious actions, the validator can lose their staked coins, making attacks less likely.
🔵 Incentivizing participation: In PoS, validators receive rewards in the form of transaction fees and sometimes additional tokens, which encourages them to participate in supporting the network.
