What is the difference between proof of work (PoW) and proof of stake (PoS)?

Proof of Work (PoW) and Proof of Stake (PoS) are two different consensus mechanisms used to validate transactions on blockchain networks. In PoW, miners compete to solve complex mathematical problems using computational power, and the first miner to solve the puzzle adds the next block to the blockchain and receives a reward. Bitcoin uses PoW. In contrast, PoS allows participants to validate transactions based on the number of tokens they hold and are willing to “stake” or lock in the network. Validators are chosen to add blocks based on their stake, and they are rewarded with transaction fees. PoS is considered more energy-efficient than PoW because it does not require massive computational power.