Proof of Stake is an idea that suggests that an individual can mine or validate blockchain transactions relative to the proportion of coins such a person has. This means that the mining power of a miner would be dependent on how much the miner has.
The Concept of Proof of Stake
Proof of Stake was introduced to remedy the challenges posed by Proof of Work. It’s working procedure is very simple.
When a transaction starts, the data of that transaction I inputted into a block of 1Megabyte capacity. After that it is spread across multiple nodes. These nodes would need to solve a mathematical puzzle. The first miner who decrypts the puzzle gets rewarded with a coin. Once a block is verified, it will be added to a public ledger. This entire process is what mining entails. To do this miners spend given the amount of energy and hardware resources. This makes them sell their coins which they get as reward in order to foot the cost of this bill. As a result, the value of Bitcoin drops. Because of this, Proof of Stake is a better option since the chances of a miner are increased in ratio to the amount of coin he possesses. This system will ultimately increase the value of Bitcoin.