Because of these disadvantages, other alternative consensus mechanisms have been suggested throughout the years. One very popular alternative is proof of stake. This means that instead of committing electricity to run computers and try to win a contest, people will stake actual coins. But how does this all work? Well, you basically lock a certain amount of funds on an everyday computer that is connected to the network. Your computer is called a node in technical terms and your locked funds are your stake. Once your stake is in place you take part in the contest of which node will get to forge the next block. You see stakers forge blocks, they don’t mine them. The winner of this contest is chosen by taking into consideration several factors: Randomization (so that no single entity will gain a monopoly over forging) Generally speaking, whoever wins the contest gets to forge the next block of transactions and is rewarded in coins for his contribution to the network.