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Cryptocurrencies employ the use of a technology called blockchain. In blockchain, time stamped information or records which are called blocks are linked to each other as they grow through the use of cryptography. This process then creates a chain of immutable records or information.
To add a block to an existing blockchain, network might use the Proof of Work concept( which I explained at https://steemit.com/cryptocurrency/@tunjineo/what-is-proof-of-work) or the Proof of Stake concept.
In a Proof of Stake system, there are validators instead of miners. These validators vote or bet on which block will be added to the blockchain network by utilizing the amount of tokens they own on the blockchain network. The more tokens a validator have the more chance of him/her getting to validate a block(but in order to prevent centralization whereby the largest token owner wins, different cryptocurrencies implement algorithms to to further increase chances of other validators winning). If a validator eventually wins, he collects network fees or transaction fees as reward instead of a block.
In order to corrupt a proof of stake system or create fraudulent blocks, the validator will need 51% of the tokens or cryptocurrencies in the network.
The proof of stake concept is designed to prevent the use of electricity for mining tokens and to prevent a network attack.
Examples of cryptocurrencies that use the Proof of Stake concept are Nxt(NXT) and PeerCoin(PPC).
