Blockchain technology is decentralized and intermediary inherently. In this ecosystem, various consensus mechanisms are used to secure networks and validate transactions. Proof-of-Work (PoW) and Proof-of-Stake (PoS) are the most well-known consensus mechanisms. In Proof-of-Work, miners ensure the security and sustainability of the network. In Proof-of-Stake, those who secure the network, confirm transactions and create blocks are called 'Validators'.

The validator is one of the most important building blocks of the Proof-of-Stake (PoS) algorithm. Because for transactions on the blockchain network to be completed and added to the chain, the transaction must be approved by the validator. The validator receives a reward for this task.

How Does the Validator System Work?

A validator is a person or persons randomly selected by the Proof-of-Stake system to add blocks to the blockchain. To be selected as a validator and to be able to do business, you need to have a certain amount of cryptocurrencies. These entities remain locked on the sidelines until you perform verification operations. Once the transactions are completed and verified, they are unlocked. Once this process is complete, validators earn rewards for completed transactions. Thanks to validators, blocks are correctly and securely added to the chain. If the validator fails to complete the transactions correctly, it can also be penalized by the algorithms.

How to Become a Validator on Blockchain?

Each blockchain network has its own requirements to become a validator. The person or persons who meet the requested conditions can be assigned as a validator in the network. Generally, in order to become a validator, you first need to own the amount of cryptocurrencies that the project in question demands. These assets must then be 'staked' in the crypto pool of that project. Many blockchain networks also require a sophisticated internet server with high processing speed. This is because transactions on the blockchain network need to be completed quickly. The person or persons who meet the requirements of the project they want to serve as a validator start to serve as a validator in the network and receive a reward in return.

What Is Proof-of-Stake (PoS)?

The Proof-of-Stake (PoS) protocol was first proposed in a paper published by Sunny King and Scott Nadal. In 2012, King and Nadal aimed to eliminate some of the problems associated with the high energy required for mining with this protocol. The PoS mechanism was first used by the cryptocurrency Peercoin. Proof-of-Stake (PoS) is an alternative to the Proof-of-Work algorithm. With PoS, blocks are processed with multiple validators and when validated, the blocks are finalized. PoS does not require any hardware or energy. Proof-of-Stake allows cryptocurrency holders to verify the correctness of block transactions.

How Does Proof-of-Stake (PoS) Work?

With PoS, those who want to secure and monetize the blockchain network need to stake cryptocurrencies on the network. The amount of cryptocurrencies to be staked is predetermined and varies according to the project. Staking then kicks in and the amount in the wallets remains there as a user's stake until the lock is lifted. Then, when the transaction is verified, the lock on the users' wallet is lifted and the rewards are distributed proportionally according to share ownership.

Proof-of-stake ensures that the validators in the network have a voice in the network and share in the revenue. Unlike Proof-of-Work, capital, not computational power, is at the forefront of revenue sharing. In the PoS protocol, users with wallets earn by verifying and validating their transactions. Whichever user has more cryptocurrencies earns more money in proportion to that.

However, the PoS mechanism also takes certain precautions to ensure that the richest user does not own and monopolize the system.  Therefore, there are two different types of elections to determine who will do which verification. One of them is "Random" and the other is "Cryptocurrency Age-based Election".

In random selection, validators are selected from the nodes with the lowest hash value but the highest stake value.  In cryptocurrency age-based selection, the verifiers with the longest holding period are selected as validators based on the length of time users have held their assets, and rewards are distributed after their verification.