Proof of Stake (PoS) is a condition that an investor performs when owning certain cryptocurrencies. By holding certain cryptocurrencies (NEO), you are rewarding other cryptocurrencies (GAS) and thus generating passive income. This means that the more altcoins you hold with this option, the more money you earn.
The first cryptocurrency that began to be presented in this way was Peercoin. People have been involved with this idea, and so they started to use some coins like NxT, Blackcoin or ShadowCoin as well.
The PoS was created as an alternative to PoW, which dealt with job-related issues. After the transaction is initiated, transaction data is mounted in a block with a maximum of 1 MB, and then duplicated on multiple computers or nodes in the network. Nodes are the block’s administrative authority and verify the legitimacy of transactions in each block. To perform a verification step, miners will have to solve a calculus puzzle known as a PoW problem. The first miner, who decrypts each block transaction problem, receives a coin reward. After block verification, he is added to Blockchain.
The classic mining of Bitcoin is now very complicated and with a much smaller profit than it used to be. That’s why people don´t mine Bitcoin. You need a pulling machine, which unfortunately is not an ordinary PC or a powerful graphics card. In order to mine, you will need special hardware – ASIC (Application-Specific Integrated Circuit).
Classic mining is costly (electricity, components, pulling machine), but for many investors, this type of mining is ideal because they only use the coins to keep their investment. Currently, it is probably the best-known cryptocurrency that supports this type of creep, cryptocurrency NEO. If you know nothing about NEO, read more about it in our section: Know your cryptocurrency.
Classic mining also has advantages. If you are mining undervalued, not very well known cryptocurrencies at a cheaper price, you can make it nicely in the future as the cryptocurrency grow steadily. Be sure to make a good overview before starting with the classic mining.