Proof-of-stake is a cryptographic algorithm that creates a potential consensus to commit transactions without the need for mining. Cryptocurrency blockchain networks can apply it as an alternative to proof-of-work, where the network members are rewarded based on their ownership of coins.
Proof of stake (PoS) is a proposed algorithm for securing a blockchain network and achieving distributed consensus. PoS would replace the current proof of work (PoW) algorithm, which requires miners to solve complex mathematical problems to validate transactions and earn rewards.
In a PoS system, the ability to create new blocks is granted to users who hold stakes in the network. These users are called validators or forgers. To prevent spamming and Sybil attacks, validators must put up a security deposit forfeited if they attempt to cheat the system.
To initiate a new block, the validator must first solve a cryptographic puzzle that verifies their identity and stake in the network. If they are successful, they are rewarded with new tokens and transaction fees.