The PoS consensus algorithm is based on the principle that when a miner owns more coins, the miner has more power to mine or validate transactions, a higher chance of building new blocks, and therefore a higher chance of receiving more reward coins. PoS is energy-efficient and can reach a consensus much faster.

Several randomization methods are available for selecting a miner to build the next block, not just based on Ether balances of externally owned accounts, in order to avoid a scenario where the richest miner is always selected:

• Randomized block selection: Uses a formula to look for the lowest hash value in combination with the size of the stake for selecting a miner.
• Coin age-based selection: Coins owned for long enough, say 30 days, are eligible to compete for the next block. A miner with older and larger sets of coins has a better chance of being granted the role.
• Delegated Proof-of-Stake: This implementation chooses a limited number of nodes to propose and validate blocks to the blockchain.
• Randomized Proof-of-Stake: Each node is selected randomly, using a verifiable random beacon to build the new block.

Ethereum is working on replacing PoW with PoS in a new tagged release.