With Ethereum signaling the switch to proof-of-stake, let's review just what that means. Proof-of-stake is a well recognized mechanism that is used by blockchain networks to achieve distributed consensus. In essence, it requires users to stake their own Ethereum to become a validator within the network. Much like Ethereum miners within the proof-of-work system, Ethereum proof-of-stake validators are responsible for ordering transactions as well as creating new blocks so that nodes can all agree on the state of the network. When weighing what makes Ethereum proof-of-stake different from proof-of-work, let's highlight a few differences and improvements.
Proof-of-work does have downsides, and unlike it, Ethereum proof-of-stake validators don't need to use a significant amount of computational power because the validators are selected at random and are not competing with one another. The validators do not need to mine for blocks, they simply just need to create blocks when chosen and then validate proposed blocks when they are not. This act of validation is also known as attesting. Essentially, attesting is the Ethereum proof-of-stake validators giving the thumbs up on blocks when they think they look good to go. Validators will get rewards for proposing new blocks and attesting to blocks they've seen. Consequently, if the validators attest malicious blocks, they will lose their stake. Proof-of-stake is the mechanism that activates validators upon receipt of enough stake. When discussing Ethereum, users will need to stake 32 Ethereum (ETH) to become a validator. As mentioned previously, Ethereum proof-of-stake validators are chosen at random to create blocks and are also responsible for checking and confirming blocks that they don’t create. A user's stake is always a good incentive as they can ultimately lose a portion of their stake for failing to validate.
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