Proof of Stake – How does it work and what are the advantages?

Recently more and more alt coins have decided to integrate a proof of stake system over the traditional proof of work system used by Bitcoin and Litecoin. But why, one may ask? Frankly, the proof of work system is not perfect. A cryptocurrency without proof of stake doesn’t just lack an incentive for users to continue holding on to their coins, but is also susceptible to a 51 percent attack if one party controls a majority of the total mining output. To solve help these problems, some cryptocurrencies, such as NXT, have implemented a 100 percent proof of stake system. Other currencies, such as Dogecoin, have implemented elements of proof of stake to take advantage of its benefits.


This is a companion discussion topic for the original entry at https://codingo.com/posts/2014-09-19-proof-of-stake-advantages/