Proof of stake replaces mining with staking. Validators lock up coins as collateral and are chosen to propose and attest to blocks. The more you stake, the higher your chance of being selected. If you validate honestly, you earn rewards. If you try to cheat, you lose part of your stake. That penalty is called slashing. The security comes from economics, not electricity. Attacking the network costs money, and the attacker loses that money.

Ethereum switched to proof of stake in September 2022. The Merge cut the network's energy use by more than 99 percent. Validators now run on ordinary servers instead of industrial mining farms. Other proof-of-stake chains include Solana, Cardano, Avalanche, and Polkadot. Each has its own validator rules, staking requirements, and reward schedules. The common criticism is that proof of stake favors large holders. The more coins you have, the more rewards you earn. That concentration can lead to plutocracy. The common defense is that staking is open to anyone and delegated staking lets small holders participate. The debate is not resolved.

Proof of stake essentials

• Validators — lock coins to secure the network
• Staking rewards — earned for honest validation
• Slashing — penalty for misbehavior or downtime
• Delegation — assign stake to a validator without running one

Proof of stake is faster and greener than proof of work. Whether it is equally secure is a matter of ongoing debate.