Proof of stake (PoS) is a consensus protocol in blockchains. It is a way to decide which user or users validate new blocks of transactions and earn a reward for doing so correctly.

Consensus protocal:

For the blockchain to work, every node needs access to the same, continually updating database. That’s why it’s important that all nodes on a blockchain come to a consensus on any changes to the record.

When new data is added to the network, the majority of nodes must verify and confirm the legitimacy of the new data based on permissions or economic incentives; these are also called consensus mechanisms. When a consensus is reached, a new block is created and attached to the chain. All nodes are then updated to reflect the blockchain ledger.

So how does proof of Stake work:

A blockchain protocol provides traders with incentives to validate transactions by rewarding them with cryptocurrency for every correct validation. As a safeguard against fraud, proof-of-stake protocols require traders to “stake” some of their cryptocurrency as collateral, which is then locked up in a deposit. If a trader adds a transaction to the blockchain that other validators deem to be invalid, they can lose a portion of what they staked.

Coming to recently proof of work is been used by most of the blockchain and crypto currency. Let's discuss about proof of work in next article