What Is Proof of Stake And Why Does It Matter?

If you have been doing research on blockchain technology or have a passive interest in cryptocurrency, you might have come across either of these terms — Proof-of-work and Proof-of-Stake.

Don’t be confused. These words are just fancy terms used to describe the methods used by the blockchain to verify transactions made on the network and allocate tokens to miners and validators.

With Proof-of-Work (PoW), transactions are validated through the process of mining or adding new blocks to a blockchain. In this process, miners compete against each other, and the miner who solves the complex algorithm needed to verify a transaction on the blockchain ledger is awarded a token.

This process of mining and awarding crypto tokens has been plagued by so many issues.

For a start, it’s very expensive to run. You need to have powerful and expensive hardware to even attempt to mine tokens. When you add in the fact that you’ll need to keep this hardware running at all times, you realize that the process is very energy-demanding.

Proof-of-Stake (PoS), on the other hand, is a security mechanism for blockchains that operates on the principle that the person with the most tokens has the highest probability of creating new blocks for the chain.

This means that each transaction made on the blockchain has to be validated by someone who has tokens or coins.

Proof-of-stake is more energy-efficient than proof-of-work because it does not need a lot of computations. This saves a ton of money and makes it easy for people to get into crypto mining.

All you have to do to mine crypto is purchase coins and then stake them to mine more. It’s that easy.

The Wicrypt Network runs on the proof-of-stake principle. You can purchase $WNT and stake with it instead of leaving it idle in your wallet. In this way, your coins work to earn you more coins and other incentives on the Wicrypt ecosystem based on the “staking score” to be announced soon.