Proof-of-stake and coin staking: advantages and disadvantages

More and more blockchains prefer to adopt the PoS mechanism and this is because of its many advantages. The most important are as following:

  • You can multiply your holding simply from hodling (passive income)

  • It is more sustainable that PoW

  • The risk of a 51% attack is minimized, as it is highly expensive and non-profitable

  • It's simple and easy to understand, you just need to accumulate an amount of tokens and then delegate them to a validator

  • This mechanism is highly preferred by many investors during a bear market

Like all mechanisms, PoS presents some disadvantages as well:

  • Once delegated your coins are frozen, as many protocols have a lock up period, and can not be sold

  • Validators can be slashed (penalized) for conducting malicious acts that harm the network and their funds are taken away. Hence, it is vital for you to conduct the necessary research and choose a creditable validator.

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