The "proof of stake" consensus process (staking for short) performs a function similar to mining in that it is a process by which a network participant is selected to add the most recent transaction packet to the blockchain in exchange for a reward in cryptocurrencies.
Unlike mining, no mathematical puzzle is solved, but the blockchain network reaches a consensus on which participant, called the validator, is allowed to generate the next block. The exact procedure differs from blockchain project to blockchain project. But network participants deposit their tokens and in return they have a chance to write a new block on the blockchain and get a bounty/reward for it. Their deposited (stacked) tokens serve as a guarantee for the legality of all new transactions that they add to the blockchain.
The choice of validators depends on the size of the provided tokens (the stake) and the time period of the provision. A weighted random selection is therefore used, with the weights of the individual participants being determined from the duration of participation and/or wealth (the stake).
How can you stake yourself?
Anyone interested can participate in staking. However, the barriers to entry to act as a standalone validator are high. In addition to the 24/7 operation of suitable hardware, minimum deposits are often necessary. Therefore, as a normal investor, you can also add tokens to a so-called staking pool on crypto exchanges such as Binance, FTX or Coinbase. This lowers the entry barrier and allows investors to earn rewards without having to operate their own hardware as a validator.
