Proof-of-Stake is a process where the creator of the next block is chosen in a deterministic way (a model that always produces the same output) according to its stake.
It's an alternative to PoW, with the main difference being that PoW requires miners to use their computing power to solve complex math problems, whereas PoS only requires them to show ownership of a certain amount of coins. Once users stake their coins, they become validators in the network, responsible for validating blocks. The idea behind PoS is that people who hold more coins have more at stake and thus are more likely to follow the rules.
A consensus protocol is what controls the laws and parameters governing the behavior of blockchains.
Consensus is essentially a set of rules that each network participant adheres to. As blockchains are not controlled by a single, central authority, a consensus protocol is used instead to allow distributed network participants to agree on the history of the network captured on the blockchain – to reach consensus on what has happened and continue from a single source of truth.
Getting PoS right is a considerable technical challenge and not as straightforward as using PoW to reach consensus across the network. For this reason, we are going to be carefully planning and integrating PoS over the next 18 months.
PoS is an alternative consensus mechanism to PoW that allows stakeholders to validate blocks in the chain and earn rewards for doing so. Adding security, increasing decentralization, and decreasing the cost of becoming part of the currency, what's not to love about PoS. Turn over the page to learn about Hybrid PoW/PoS.