Proof-of-Stake Consensus

Definition ∞ Proof-of-Stake (PoS) consensus is a mechanism blockchain networks use to achieve distributed agreement on the ledger’s state. Validators are selected to create new blocks based on the amount of cryptocurrency they hold and stake as collateral. Unlike Proof-of-Work, this method consumes significantly less energy. It incentivizes honest participation through economic penalties for malicious behavior.
Context ∞ The transition of major blockchains to Proof-of-Stake has intensified discussions around energy efficiency, network centralization, and economic security. Regulators are also examining PoS models concerning their potential implications for security and market concentration. This consensus mechanism continues to be a subject of technical and economic debate.