Proof of Stake

Proof of Stake is a method that cryptocurrency networks use to verify transactions and create new coins, where validators are chosen based on how much cryptocurrency they hold and are willing to lock up as collateral. Think of it like a lottery where buying more tickets (holding more coins) increases your chances of being selected to validate the next batch of transactions. You'll encounter this term when researching cryptocurrencies like Ethereum, since it determines how the network operates and who earns rewards. It matters because it's more energy-efficient than older methods, making some cryptocurrencies more environmentally friendly. For example, someone might say, "I'm staking my coins to earn rewards through Proof of Stake."