Proof-of-stake, also referred to as "staking" is a blockchain consensus protocol that I believe is not getting proper attention. While much of the crypto world is discussing the latest in crypto mining hardware, stakers are quietly earning interest on their holdings, without spending a dime on expensive ASICs or electricty.
Every cryptocurrency has a number of essential properties, such as price (pegged to USD or BTC), issuance rate, total supply, total amount in curculation and trading volume, among others. When describing a crypto coin to a non-technical person or someone more interested in the economic aspect, it does make sense not to specify what the consensus protocol is - proof-of-work (PoW) or proof-of-stake (PoS). Truth is, there are a number of other consensus protocols but they are either a combination between PoW and PoS or are not popular enough to consider. Now, let us examine the basic differences between the major blockchain consensus methods: | | Proof-of-Work | Proof-of-Stake | |---|--------------------|---------------------| | **coin allocation** | to "miners" who solve a cryptographic puzzle| percentage allocation to those having a set minimum of coins| | **reward** | per block + transaction fees | transaction fees only | | **hardware cost** | considerable + ongoing expenses (electricity and wear) | minimial, not always required | | **functions** | SHA256, Scrypt, Blake-256, CryptoNight | none as such, there is a definition of interest rate | | **notable coins** | BTC, BCH, NMC | NAV, NEO, [POS (PoSToken)](https://postoken.org/) | To me, the most notable examples from both categories are Bitcoin (BTC) and Neo (NEO). [There is a new kid on the block](https://bitcointalk.org/index.php?topic=2110712.0), also - POS token. It is worth noting that POS is an Ethereum-based token, which means that a smart contract governs the staking logic. On the other hand, NEO for example, has its own blockchain. By no means, this comparison is exhaustive enough. In future articles I plan to go into more detail about what is worth staking. My goal was to inform people that interest rates have a huge competitor in the face of Proof-of-Stake coins. So it is not a surprise that there is a growing percentage of investors whose portfolio is predominantly comprised of different cryptocurrencies. P.S.: [an excellent list of POS coins](https://steemit.com/staking/@dwand/hodl-collectors-edition-my-compiled-list-of-coins-that-are-proof-of-stake-consensus-mechanism)