Several articles highlighted the best PoS coin and why people should consider investing in them, but very few explains the nitty gritty, how it works differently from the traditional PoW and it benefit. Here is an article to dissect and help you understand how PoS works.

Mining in Blockchain is the process by which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger. Each time a cryptocurrency transaction is executed, the miner is responsible for ensuring that the information is accurate and that the blockchain is updated with the transaction. Proof of Work (POW) and Proof of stake (POS)  are the two most popular ways adopted by major cryptocurrency.
The concept of proof of stake was created as an alternative to proof of work(pow) and it has become one of the most widely used mining schemes as it rewards miners based on the numbers of token staked.

The consensus is a dynamic way of reaching an agreement in a group. In a centralized system, the central body is in charge of making decisions. To improve on this, decentralized ecosystems make the use of “consensus protocols.” The purpose of a consensus protocol/mechanism in blockchain is to verify that information being added to the ledger is valid i.e. the network is in consensus. This ensures that the next block being added represents the most current transactions on the network, preventing double-spending and other invalid data from being appended to the blockchain.
These consensus mechanisms are crucial for a blockchain in order to function correctly. They make sure everyone uses the same blockchain. Everyone can submit things to be added to the blockchain, so it’s necessary that all transactions are constantly checked and that the blockchain is constantly audited by all nodes. Without a good consensus mechanism, blockchains are at risk of various attacks.
Several different consensus mechanisms have been devised, each with its own advantages and disadvantages. They all have the same basic purpose as described above, but differ in methodology. The primary difference between different consensus mechanisms is how they delegate and reward transaction verification.

The most popular blockchain consensus mechanisms are the Proof of Work (PoW) and Proof of Stake (PoS) systems. This article will focus on describing and comparing PoW and PoS, note that there are a number of other systems, Delegated Proof of Interest (DPoS) and the Federal Byzantine Agreement (FBA).

Proof Of Work(POW) is the first and one of the most widely accepted consensus mechanism.

In the Bitcoin White Paper, Satoshi Nakamoto theorized that the only way to overpower the Blockchain network is through a 51% attack (Read more about the 51% attack in the Blockchain basics). The Bitcoin White Paper suggested the use of a proof-of-work system to prevent the subject from gaining majority control of the network. Applying proof of work in this way is probably the central idea required for Bitcoin, as it allows for a non-confidential and distributed consensus.

The idea was first published by Cynthia Dwork and Moni Naor in a 1993 article. However, it was not until 1999 that the actual term “Proof of Work” was coined by Markus Jakobsson.

In the Bitcoin White Paper, Satoshi Nakamoto believes the only way to overpower the Blockchain network is through a 51% attack. The Bitcoin White Paper suggested the use of a resilience system to prevent an entity from acquiring majority control of the network. Applying proof of work in this way is probably the central idea required for Bitcoin as it allows for a non-confidential and distributed consensus.


The consensus algorithm called Proof of Stake was introduced in 2011 on a Bitcointalk forum to solve problems of the currently most popular algorithm in use – Proof of Work. Although they both have the same goal of reaching consensus in the blockchain, the process of reaching the goal is quite different

The Proof Of Stake algorithm uses a pseudo-random selection process to select a node to be a validator of the next block, based on a combination of factors that can include role age, randomization, and node richness.

Users who wish to participate in the mining process are required to lock a certain amount of coins into the network as their stake. The size of the stakes determines the chances that the node will be selected as the next validator to forge the next block – the higher the stakes, the greater the chances. In order not to favor the process with only the richest nodes in the network, more unique methods are added to the selection process. The two most commonly used methods are “Random block selection” and “Coin selection”.


PoW requires alot electricity power to mine new coin into the chain meanwhile, PoS is not a system that “the fastest person who did calculation processing” will be the successful minor, like PoW, but it depends on “the number of years holding coins” and “the amount of coins held”. It doesn’t require an enormous amount of electricity or high-performance computers. Therefore, PoS can reduce the risk of coin concentration to a certain organization or company.

Looking at a case where “Company A owns a lot of high-performance computers and ensures enormous electric power.” And suppose that Company A possesses 51% of the calculation amount of the whole world. This means Company A can generate a block in 51% probability by being successful in calculation processing. Then this company can generate the longest Blockchain (most blocks). If a Blockchain branch in some ways, the “longer” branch is considered as “correct”, so Company A is able to create dishonest records as many as it wants. Although this isn’t something possible considering the price of BTC but it is achievable. Although PoS didn’t solve the whole risk of 51% attack, it is less likely to happen with PoS than PoW. This is because of the element, “the amount of coin possession”, first of all, there is a high hurdle to “hold a lot of coins”. Proof of Stake (POS) is also seen as less risky in terms of the potential for miners to attack the network, as it structures compensation in a way that makes an attack less advantageous for the miner.

Even though PoS looks more advantageous, it has its own disadvantage too. Since you have to stake more coin to get more and considering the volatility of cryptocurrencies, staking a lot of PoS coin could be at a disadvantage is the price value of the coin ended up lower than when you first purchase it.


The Internet of Services (IOS/IOST) platform was built around a seemingly simple idea to build a scalable, lighter and easy accessible blockchain.

The IOST consensus mechanism even though it uses Proof of Believability (PoB), has all the features of proof of stake embedded in it. IOST utilizes a Proof-of-Believability (PoB) consensus protocol. It’s a modification of the Delegated Proof-of-Stake (DPoS) mechanism, implemented in the highly scalable public chain like EOS and Tron.

According to the IOST CTO Terry Wang “Proof of Believability solves the scalability trilemma in blockchain, which states that you can only choose two of three: (a) scalability, (b) decentralization, or (c) security. 

PoW consensus chose decentralization and security, which results in slow network speeds. DPoS consensus chose scalability and security, which results in network transactions being handled by a small exclusive group of supernodes.

Proof of Believability (PoB) essentially has a points system that determines which nodes get into the node producing committee, which changes every 10 minutes. Nodes receive points based on their staking amount, and these points are used up as they produce blocks. Thereafter, for the next committee, other nodes that have yet to use up their points would take their turn in the block production committee. This creates a system where all the nodes get to participate in block production (decentralized), while at the same time allowing the IOST network to reach speeds of up to 8,000 transactions per second (scalable). This helps to reduce centralization found in competing DPoS networks.

IOST token holders can also participate in the contributions of the ecosystem by staking (known as voting in the IOST community) in the partner IOST program. Voting allows token owners to select the most reliable nodes to secure the network, and in turn, token owners will receive voting rewards as long as they continue to share their IOST.

Rewards start to accrue after 24 hours when IOST is deposited into the PoS mining pool. The reward users receive will be automatically transferred to the pool every day to produce more rewards. According to the IOST staking rules, it takes 7 days to withdraw IOST out of the pool when you unstake your staked IOST.
IOST still remains one of the high yielding PoS coin according to

You can check through this FaQ to know how to stake your IOST