What Is Proof Of Stake?
In a Proof of Stake system, the odds of a miner creating the next block are proportional to the stake of coins they hold. It’s a far more energy-efficient approach than the Proof of Work approach that bitcoin pioneered.

Bitcoin solved a problem that many experts believed did not have a solution. Since data can be copied so easily, how can money be sent directly from one person to another online without worrying that the sender used the same funds more than once? This apparent dealbreaker, known as the Double Spend Problem, is why traditional payment systems have a trusted intermediary like a bank to keep accounts for everyone.

Proof of Work

Satoshi Nakamoto, Bitcoin’s anonymous creator, realised that one way to do away with a single, trusted authority was to share accounts publicly with everyone. Users submit transactions to the network, and the nodes or ‘miners’ that maintain the shared ledger all compete to be the one to add recent transactions to the next block. This competition is computationally hard, and a huge amount of collective processing power underpins the bitcoin network — along with significant hardware and energy costs.

The competition is organised so that an answer is found roughly every ten minutes. When a miner finds the answer, a new block of transactions is created and linked (‘chained’) to the previous block to create a continuous record. The winning miner is sent a tranche of new bitcoins, plus all the fees from the transactions in that block, as a reward for their work in processing transactions and keeping the network secure. Meanwhile, the entire network checks the blockchain to make sure all of the transactions in the blocks make sense and add up. Once a transaction has been included in the blockchain and a number of new blocks have been added on top of it (typically three to six), it is considered legitimate and fully confirmed — part of the permanent and tamper-proof record.

What this means is that it would take a huge amount of processing power to submit a fraudulent transaction, because the rogue miner would be competing against the rest of the network to add it to a new block. They would then have to add not just that block, but several other blocks in a row on top of it, to ensure the bad transaction was fully confirmed without the next miner and the rest of the network discarding it. In practice, it is far more lucrative for a miner to work with the rest of the network and receive the rewards than to waste time and energy trying to submit a transaction that everyone else will simply ignore.
['Waves Tech']
['Mining', 'Wavesplatform', 'Bitcoin', 'Blockchain', 'Proof Of Stake']