Proof of Stake (PoS) is an alternative to the more common Proof-of-Work (PoW). With PoW, you use machines to generate hashes and the main metric is the hashrate. With PoS, you use your wallet to generate stake and the main metric is blocksize. The main advantages of PoS are:
- No crazy electricity bill (and silence too)
- No concentration of large mining rigs
Both PoW and PoS reward you to secure the network. With PoW, you are getting rewarded when you find a block. With PoS, you are getting rewarded when you successful produce a hash within a certain requirement, before anyone else does (this is how PoW works too). With PoS you are trying to get a small hash that is less than the spacing target multiplied by coin weight, so the higher the coin weight you have, the easier it is to produce a hash under that amount.
Your coins are grouped into blocks. Contrary to PoW where you "look" (mine) for blocks, in PoS you already have these blocks. You are not rewarded for finding, but for using these blocks to secure the network.
The actual reward works like a lottery. "If there is a lottery with 10,000 tickets and you have 7,500 of those tickets, then you have 75% chance of winning that lottery. But since a lottery is random, someone that only has 1 ticket can still win." (credits: presstab). Replace "tickets" with "block of identical weight." Note that for the same reason (and here, it is a bit different than a lottery), you can have weight lower than the biggest ones, and still win - of course, your chances are smaller.
In the case of HyperStake, this is how it goes:
- There is an 8.8 day "cool-off" period.
- Then your block start accumulating weight and the more weight it gets (this is examined once every 90 seconds), the higher the chances you'll get a reward.
- Then the block will be divided in two blocks of (original amount+reward)/2, which be stripped of their accumulated weight and coin age.
Back to 1 and start again (cool-off, staking, reward, split-and-reset, cool-off)
HyperStake implements some inflation control mechanisms, which doesn't mean they cannot be optimized.
- Decide for a target block size. 4000 is a safe bet at present difficulty.
- Click on the "receive" icon and copy your own address.
- Click the "send" icon.
- Then "Coin Control".
- You'll see one or several lines, each line is a block. Sort by increasing age and select the one with the least age, to be sure to waste as few coinage as possible (the split or merge operation will reset your coinage).
- Check enough blocks to have 4000 HYP. Click OK.
- You're back on the "Send coin" window. Paste your address (step 2), then move to "Amount" and enter the value you decided at step 1.
- Click Send and confirm any window. You'll get a "payment to yourself" transaction, with negligible fees.
- Start again at step 3.