In this brief video, Vitalik Buterin describes the difference between proof of work and proof of stake and why he considers proof of stake to be a more efficient consensus mechanism.
Proof of stake is a type of algorithm by which a blockchain network aims to achieve distributed consensus. In proof of stake, the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e., the stake).
Proof-of-work uses mining; which requires solving computationally intensive puzzles to validate transactions and create new blocks. This uses a tremendous amount of energy.
Proof of stake requires much less energy consumption.
Consensus is fundamental to a blockchain. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.
Consensus algorithms are in continual development to increase performance and efficiency.
Vitalik Buterin is a Russian-Canadian programmer and writer primarily known as a co-founder of Ethereum and as a co-founder of Bitcoin Magazine.