# Who does the work in proof of stake (POS)?

I heard about proof of stake lately, and people are saying you don't need GPU or any mining power, as long as you have the coins, they will generate you more coins (more coins you have, more earnings you get?). So I'm wondering, 1. doesn't that make the rich richer, and poor still poor? 2. If no GPU or mining power needed, what was done? Is there no algorithm to be solved? If yes, who does it in that case since people are not mining in POS?

In PoS each node is submitting hashes in a similar way to PoW, if a hash is found that is less than the target then the block is created by that node, sent to it's peers, and if they agree, pass it to their peers. What is different is that in PoW each node iterates through as many hashes as possible, using data from past blocks and a random number called a nonce. The more nonces and hashes per second a PoW miner makes, the better chance they have of finding a block. In PoS there is no nonce, the miner (minter) is only allowed to use the data from the past blocks, and use that combined with the number of coins in each UTXO in their wallet. So if you have 10 UTXOs then you can only produce unique 10 hashes per second. To prevent people just making more UTXOs, UTXOs with a larger number of coins have a better chance of finding a valid hash, so there is no benefit in having 1 UTXO of 10 coins, or 10 UTXOs of 1 coin each. A PoS minter could make more than 1 hash per UTXO per second, but the actual hashes would just be duplicates as there is no variance in the inputs. So there is no reason to do so as its just a waste of energy to create duplicate hashes.

Theoretically the rich get richer in pure PoS, but this is easily avoided by using other mechanisms to assign coins, like work done on scientific computations (Curecoin/Gridcoin). In PoW those with more money to invest in hardware and energy get richer, which leads to them getting more hardware, it's the same problem.

• Very interesting, do you have any references for this info for some additional reading? Also, I see the argument that POS and POW have the same problem, but POS just streamlines it straight into purely how many coins you have rather than giving anyone a chance to create innovative ways to generate more hashpower. Jul 25, 2018 at 15:26
• It's important to note PoS isn't one thing, it has many implementations that vary in details. In PoSv1 the age of UTXOs were multiplied by the coins, this was later seen as a potential attack and some removed the age element. Others created novel implementations like PoS-Time, PoS-Velocity, Ethereum Casper/Slasher and dPoS (d is for delegated). You can see for reference blackcoin.co/blackcoin-pos-protocol-v2-whitepaper.pdf or look in kernel.cpp of any PoS coin github Jul 26, 2018 at 16:37
1. doesn't that make the rich richer, and poor still poor?

It does. Do you know another Universe without this rule?

1. If no GPU or mining power needed, what was done?

The whole system (consensus) decides who can pack transactions in next block based on the balances. And the miner gets the block reward and fees (if any). This is very close to current fiat system.