What are the downsides of proof of stake? I am very skeptical about the security of the proof of stake system. Is it really that secure? Are there no disadvantages?
Vanilla proof-of-stake doesn't achieve consensus, unfortunately. People staking their coin can vote for both forks of the blockchain, and can even mine effortlessly in secret. In PoW this is impossible, as you are literally wasting energy by mining both sides of a fork.

To mitigate this, most modern PoS schemes use a mixture of PoS and PoW to ensure that someone will finally decide the chain.

http://www.reddit.com/r/Bitcoin/comments/1oi7su/criticisms_of_proofofstake/ for more discussion.