Proof of Stake

Proof of Stake (PoS) is a far more sustainable consensus algorithm that will be the basis of Ethereum once Ethereum 2.0 or (Eth2) goes live. In PoS, blocks aren’t created by miners doing work, but by minters staking their tokens to “bet” on which blocks are valid. This network upgrade alone will cut Ethereum energy consumption by over 99%. The mechanism works using an algorithm that selects participants with the highest stakes as validators, assuming that the highest stakeholders are incentivized to ensure a transaction is processed. The idea is that those with the most coins in circulation have the most to lose so they are positioned to work in the interest of the network. The number of coins that a network may require changes just like the difficulty in PoW.