Proof of stake

We start by discussing proof of work, the original blockchain consensus algorithm, including how it works, its limitations, and common attacks against it. Then, we move on to proof of stake, which is a popular alternative to proof of work. We learn how proof of stake works, how it can be attacked, and its advantages over proof of work.

Proof of stake uses the principle of security via scarcity, where the amount of cryptocurrency you own determines your power on the blockchain. Users can stake their cryptocurrency, committing not to spend it, and in exchange, they have a chance of being selected to create blocks. It's like participating in a raffle, where the more tickets you have, the higher your chances of winning a prize. Unlike a raffle, you can withdraw your stake at any time and get your money back, but you won't be part of the block creation process anymore. Proof of stake offers a more efficient and cost-effective way to secure the blockchain network.