Proof of work vs proof of stake.
In plain English
Proof of work and proof of stake are the two main ways a blockchain reaches agreement on which transactions are valid without a central authority. Proof of work, used by Bitcoin, has computers compete by burning electricity to solve puzzles, which is secure but energy-hungry. Proof of stake, used by Ethereum since 2022, instead has participants lock up, or stake, their own coins for the right to validate blocks, and they lose part of that stake if they cheat. Proof of stake uses far less energy. Both aim for the same goal: keeping a shared ledger honest across many strangers.
01Why it matters
The method a network uses affects its energy footprint, its security tradeoffs, and how new coins and rewards are distributed, all of which matter to anyone holding that coin.
02The math, step by step
To validate on Bitcoin, a proof-of-work network, you would buy machines and pay for electricity. To validate on Ethereum, a proof-of-stake network, you would instead lock up 32 ETH as a stake, which you can lose if you act dishonestly.
03What this is NOT
Proof of work versus proof of stake is NOT a ranking of coin quality. It describes how a network secures itself, with different tradeoffs in energy and design, not which investment is safer.
04Receipts
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