Cryptocurrencies · lesson 3 of 20

Proof of stake

On 15 September 2022 Ethereum switched from proof of work to proof of stake, with an upgrade called the Merge. According to the Ethereum Foundation, the network's energy consumption fell by more than 99%.

In proof of stake nobody competes with computing power. Validators lock up an amount of cryptocurrency as collateral, the stake, and are selected to propose and confirm blocks.

Anyone who behaves dishonestly loses part of the stake. In return for their service validators receive rewards. The risk is greater concentration among those holding many coins or among large platforms.

Questions

1. What changed with the Merge of 15 September 2022?

Ethereum switched to proof of stake

Energy consumption fell by more than 99%, according to the Ethereum Foundation.

2. What is the stake?

The cryptocurrency locked up as collateral by validators

Anyone who misbehaves loses part of it.

3. What risk does proof of stake present?

Greater concentration among those holding many coins or large platforms

Those with more stake have more weight in the network.

Continue from lesson 4

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Proof of stake

Questions

Continue from lesson 4

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