( 28th August 2019 )
Orbs uses a similar process, dubbed randomized proof-of-stake (or RPoS) but selects an entire committee rather than a single block leader. Each node is selected randomly using a verifiable random beacon to propose the current block of transactions. Then, the block is verified through that committee containing a pre-set number of nodes from within the total network of nodes available.
Advantages
Incentives differ between the two systems of block generation. Under proof of work, miners may potentially own none of the currency they are mining and thus seek only to maximize their own profits. It is unclear whether this disparity lowers or raises security risks. Under proof of stake, however, those "guarding" the coins always own the coins, although several cryptocurrencies do allow or enforce the lending of staking power to other nodes.
Criticism
Some authors argue that proof of stake is not an ideal option for a distributed consensus protocol. One issue that can arise is the "nothing-at-stake" problem, wherein block generators have nothing to lose by voting for multiple blockchain histories, thereby preventing consensus from being achieved. Because unlike in proof-of-work systems, there is little cost to working on several chains.
Many have attempted to solve these problems
Peercoin is the first cryptocurrency that applied the concept of PoS. In its early stages, it used centrally broadcast checkpoints signed under the developer's private key. No blockchain reorganization was allowed deeper than the last known checkpoints. Checkpoints are opt-in as of v0.6 and are not enforced now that the network has reached a suitable level of distribution.
Ethereum's suggested Slasher protocol allows users to "punish" the cheater who forges on top of more than one blockchain branch. This proposal assumes that one must double-sign to create a fork and that one can be punished for creating a fork while not having stake. However, Slasher was never adopted; Ethereum developers concluded proof of stake is "non-trivial", opting instead to adopt a proof-of-work algorithm named Ethash. It is planned to be replaced by a different PoS protocol called "Casper".
Nxt's protocol only allows reorganization of the last 720 blocks. However, this merely rescales the problem: a client may follow a fork of 721 blocks, regardless of whether it is the tallest blockchain, thereby preventing consensus.
Hybrid "proof of burn" and proof of stake. Proof-of-burn blocks act as checkpoints, have higher rewards, contain no transactions, are more secure, and anchor both to each other and to the PoS chain but are more expensive.
Decred's hybrid proof-of-work and proof-of-stake, in which proof of stake is an extension dependent on the proof-of-work time stamping, based on the "proof of activity" proposal, which aims to solve the nothing-at-stake problem by having proof-of-work miners mining blocks and proof-of-stake acting as a second authentication mechanism.
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