Many people talk about NXT Proof of Stake (PoS) being insecure due to the "nothing at stake" problem. I read up some posts about nothing at stake, but I still do not understand how it works. Can someone explain how the "nothing at stake" works in laymen terms and how it affects Proof of Stake coins like NXT?
Essentially, PoS' nothing at stake problem is that you don't lose anything by mining. In Bitcoin, you lose the money you spent on energy to power your miners. Thus, in bitcoin mining you want to make sure you are mining on the correct chain all the time so that you have the best possible chance of your solved block being accepted by the network. In PoS coins, for the most part, there is no incentive to just mine on one chain. That is, a rational miner will mine on all chains that he/she knows about, because it doesn't cost them anything to mine on them (just a few CPU cycles) and they maximize their profit by mining on multiple branches. But since everyone mines on multiple branches, no one can come to a consensus!