⛓️ Blockchain Fundamentals
Consensus: PoW vs PoS
How strangers agree on the truth without a boss.
7 min read
The agreement problem
If thousands of nodes each receive transactions in a slightly different order, how do they all agree on one official history? That's the consensus problem, and it's the core innovation blockchains solve.
Two mechanisms dominate today: Proof of Work and Proof of Stake. Both make it expensive to cheat and reward honest participation.
Proof of Work
Miners compete to solve a hard hashing puzzle. The winner proposes the next block and earns a reward. Solving takes enormous electricity, so rewriting history would mean out-spending the entire honest network - a 51% attack that's usually uneconomical.
Bitcoin is the best-known Proof-of-Work chain.
Proof of Stake
Instead of burning electricity, validators lock up (stake) the network's token. The protocol picks validators to propose and attest blocks. Misbehave, and part of your stake is destroyed - 'slashed'.
This uses far less energy. Ethereum switched from Proof of Work to Proof of Stake in 2022.
Check your understanding
3 questions from this lesson, with the correct answer already marked.
1. In Proof of Work, what secures the chain?
- Locked-up tokens
- The cost of the computing power needed to out-mine everyone
- A trusted validator committee
- Government licensing
Rewriting history would require more computing power than the honest majority - expensive enough to deter attacks.
2. What can happen to a Proof-of-Stake validator that cheats?
- Nothing
- They earn extra rewards
- Part of their staked tokens is destroyed (slashed)
- Their wallet is frozen by a bank
Slashing destroys part of a misbehaving validator's stake, aligning their incentives with honesty.
3. Which chain moved from Proof of Work to Proof of Stake in 2022?
- Bitcoin
- Ethereum
- Litecoin
- Dogecoin
Ethereum's 'Merge' in 2022 switched it to Proof of Stake, cutting its energy use dramatically.