Proof of Stake is a mechanism of consensus which blockchain networks use to validate the transaction and secure the network. Other than this, the Proof of Work consensus mechanism requires miners to solve difficult puzzles with great computational power. In Proof of Stake, validators are chosen to create a new block in a series through various combinations of random selection and/or based on a number of cryptocurrencies a validator owns and is willing to "stake" for collateral.
Within the Proof of Stake consensus algorithm, some amount of cryptocurrency needs to be locked in the network by participants. In its turn, the system randomly selects a few validators to propose and then verify new blocks of transactions. The chance to be selected is proportional to the amount at stake-the more coins a validator stakes, the higher his chances. This dramatically reduces energy consumption for maintaining the network compared to PoW; therefore, the PoS is highly energy-efficient.
Validators are incentivized with transaction fees and, in most cases, newly minted coins as a reward for their work. In the case of maliciousness or any attempt at manipulating the network, they risk losing some or all of their staked assets. This process is called slashing. This economic incentive secures validators acting in the best interest of the network.
Overall, PoS is greener and more scalable than PoW: it allows for efficient consumption, has less environmental impact, and reduces barriers to entry among participants.
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~ Nesaty