Proof-of-stake

Proof-of-Stake (PoS) is a concept that allows a person or entity to mine in accordance with how many coins he/she possesses. Therefore, the more coins that are owned the higher the mining power.

Proof of Stake was proposed as a less risky alternative to Proof of Work in regards to attacking the network, since the compensation is structured in such a way that makes it less advantageous for the minor to attack the system.

Additionally, mining uses significant energy in proof of work concepts.

Proof-of-stake addresses this issue by assigning proportional mining power based on the coins held by a miner. For example, a miner who owns 3% of total available supply of Bitcoin theoretically can only mine 3% of the blocks.