Bitcoin Forum

Hi, Ive been seeing this term. What is PoS coin? Is it different from altcoin?

Thank you in advance!

POS is Proof of stake. POW is proof of work
POS: You will stake and earn the coins here.The coins will be staked by the proof of stake algorithm and circulating coins increase in this way.Staked coins will be added to the holding wallets proportionally with a fixed annual rate.
POW: You will mine and earn the coins here.
Some coins may be both POW and POS.

As a newbie, it might be a little complicated so I will try to explain it simply;

Firstly, POS means Proof of stake.
Secondly, POW means Proof of work.

Now you may be wondering just what the hell that even means. Don't worry, I will explain  :)

Let's start with Proof of work since it came first. Proof of work is what Bitcoin and a lot of other currencies use to confirm blocks and add them to their blockchain. It basically means, computers have to solve a complicated puzzle in order to confirm that a block is legitimate. The computer that solves the puzzle earns a reward (bitcoin). This is known as mining. Once a solution is found, a new block is generated. Since only one solution can be given to a block, computers race against each other to get the reward (this is their incentive). This also ensures that a computer can't 'hack' the blockchain and change it for their own financial gain (unless they hold the majority of the computer power to solve the puzzle; 51% attack). When a block is confirmed, the computers have reached consensus. Proof of work is a consensus system.

Ok now you understand Proof of work, we can talk about Proof of stake.

Proof of stake is another way in which computers can reach consensus. For simplicities sake, we will assume that the POS newtwork we are talking about only uses proof of stake. Proof of stake means that instead of solving complicated puzzles to get the block reward and confirm blocks, computers (wallets) "stake" their coins and choose which blocks to confirm. The amount of power that a computer(wallet) has to confirm blocks is dependent on how much of the corresponding cryptocurrency they hold. So what is stopping computers from 'hacking' the chain and changing it for their own financial gain? Well, if a (wallet) chooses a bad block, they will lose the amount of funds in their wallet. So why would computers decide to stake their cryptocurrency? Because they earn rewards on each block that they confirm.

If you want a more detailed explanation feel free to PM me  :)

Nice explained. When you investing on PoS coin mean you dont need to working :). You must only do stake one time then waiting for a time with interest rate. When your coin is matured -> Cash out.

and you need to know most PoS coin or token have less value over time, and i think PoS is not really good if you a whale and you can buy a big amount of coin and stake it thats mean you can have more coin than other

i can say, this is one of many way to get a passive income in crypto world,,
with Proof of stake or POS,, you just keep your coin in your wallet and you will receive interest on it

Nice explanation.Thank you.This would help newbies who have confusion between POS and POW.

Thank you for this explanation. Brief and well-explained.