Proof of Work (PoW) vs. Proof of Stakes (PoS) Mining

There are two major forms of mining cryptocurrency, Proof of Work (PoW) and Proof of Stake (PoS). The objective of both of these forms of mining is to:

1. Verify the legitimacy of a transaction, or avoiding the so-called double-spending;
2. Create new digital currencies by rewarding miners for performing the previous task. 

Proof of work is an expensive and intense process where miners are essentially solving a mathematical puzzle. Should the miner be the first to solve the mathematical puzzle and the other miners in the network confirm the mathematical puzzle is in fact correct, they will be rewarded. The idea of proof of work mining is that the network is kept secure because the process of solving these mathematical puzzles is expensive for miners. In return, the miners are rewarded for the ‘work’ they complete.

Proof of stake aims to achieve the same outcome as proof of work, however it does it in a different approach. Rather than the proof of legitimacy coming from spending large amounts of computing power to solve intense mathematical puzzles, legitimacy comes from large amounts of the network’s tokens being locked up for an extended period of time.

In POS, instead of miners, there are validators. The validators lock up some of their Ether as a stake in the ecosystem. Following that, the validators bet on the blocks that they feel will be added next to the chain. When the block gets added, the validators get a block reward in proportion to their stake. The idea behind PoS is the network is kept secure because there is an increasing expense for a validator to attack the network. In order for a validator to gain 51% of the network hash power they would need to own 51% of the total locked supply of coins. By owning 51% of the total locked supply of coins, there would become a substantial financial disincentive for the validator to maliciously attack the network.