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🔒 Proof of Stake

Last verified: June 2026

Proof of Stake is the modern, energy-efficient way blockchains agree on the truth — instead of burning electricity, participants put their own coins on the line. Here's how it works.

EthereumProof of WorkConsensusStaking

The idea in one line

Where Proof of Work secures a blockchain by making computers burn electricity, Proof of Stake secures it by making participants put up money. It's the system Ethereum switched to in 2022, and most newer blockchains use it.

How it works, simply

Instead of miners racing to solve puzzles, Proof of Stake has "validators." To become one, you lock up some of the network's coins as a deposit — this is called staking. The network then picks validators (partly at random, weighted by how much they've staked) to check transactions and add new blocks. Do the job honestly, and you earn rewards. Try to cheat, and the network can take away part of your deposit — a penalty called "slashing."

How Proof of Stake validator selection and slashing works Validators stake coins as a deposit. One is chosen to add the next block and earns a reward for honest behaviour. A dishonest validator has part of their staked deposit destroyed, called slashing. 🔒 Validator A ✓ chosen, honest staked 32 ETH 🔒 Validator B waiting, staking staked 32 ETH 🔒 Validator C ✗ acted dishonestly staked 32 ETH 💰 Earns a reward for validating honestly ⚡ Gets slashed part of their stake is destroyed Skin in the game: honesty is rewarded, cheating is expensive.

Why it keeps the network honest

The security comes from having skin in the game. A validator who tries to approve fake transactions risks losing the money they staked. Since you need a large stake to have influence, attacking the network would mean putting a fortune at risk of being destroyed — so it's far more profitable to play by the rules. Honesty pays; cheating is financially painful.

Why people prefer it

The headline advantage is energy: Proof of Stake uses a tiny fraction of the electricity that Proof of Work does — Ethereum's switch cut its energy use by over 99%. It also lets ordinary holders earn rewards by staking (sometimes via others on their behalf), without needing expensive mining equipment. Critics argue it can favour those who already hold the most coins, but it has become the dominant approach for new blockchains.