Proof of Stake
AdvancedProof of stake is a method used by some blockchains to agree on which transactions are valid, in which participants called validators lock up, or stake, their own cryptocurrency for the right to propose and confirm new blocks.
Instead of competing with computing power, as in proof of work, validators are chosen to create and confirm blocks based partly on how much cryptocurrency they have staked. They earn rewards for honest work, and they can lose part of their stake, a penalty called slashing, if they act dishonestly or fail to perform their duties.
Ethereum switched from proof of work to proof of stake in September 2022, in an upgrade known as the Merge, cutting its energy use dramatically.
For example, a validator on a proof-of-stake network might lock up a set amount of cryptocurrency, run software to check and confirm transactions, and earn a share of new tokens and fees as a reward.
Proof of stake uses far less energy than proof of work. Critics argue it can favour those who already hold large amounts of cryptocurrency, potentially concentrating control. Many holders stake through exchanges or staking services, which raises questions about custody and regulation.
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