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Proof of Stake (PoS) Consensus

Understanding fundamental consensus mechanisms

"Node” and “Proof of Stake” go hand in hand. We strongly encourage everyone to fully understand these concepts before they use the Valid platform. 

Proof of Stake (PoS) is a consensus mechanism that allows for transactions to be validated by a node on a blockchain network.  A consensus mechanism is simply a way in which Nodes remain synchronized and agree in which transaction become validated on the blockchain.

A Validator Node, or simply “Node,” is any computer or server that is connected to a network that validates transactions and stores a copy of the networks’ ledger i.e. all of the transactions that have ever happened on a particular blockchain. Those who operate Validator Nodes are rewarded for validating transactions by the network; typically, but not always, derived from the transaction fee payed by the person who is initiating a transaction. 

To ensure that node operators remain honest and only validate accurate transaction, they are required to “stake” liquidity inside their validator node. If the validator is caught validating false transactions then the operator will be fined by the network. The network will take their penalty fee out of the operators “stake” in the validator node. The common term for this event is known as “Slashing.” There are other reasons why a Node may be "slashed" but we won’t get into that right now. 


The above material is not a substitute for your own research. We highly encourage all users to fully understand validator nodes and the relationship to the Valid platform before using.

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