Web3 & Blockchain

What is Proof of Stake?

Quick answer

A blockchain consensus mechanism in which validators lock up cryptocurrency as collateral to earn the right to propose and confirm blocks.

Proof of Stake, explained

In proof of stake, instead of competing with computing power, participants called validators stake coins, effectively putting money at risk as a security deposit. The protocol selects validators to propose new blocks and others to attest that those blocks are valid. Honest participation earns rewards, while provably dishonest behavior can lead to slashing, where part of the stake is destroyed.

Because it does not require energy-intensive mining, proof of stake uses far less electricity than proof of work. Ethereum switched to proof of stake in 2022, and many newer blockchains use it or variations. Critics raise concerns that wealth can concentrate influence among large holders and staking services, which may affect decentralization over time.

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