Exploring Concept: Understanding Proof of Stake and its Impact on Ethereum

By: Eliza Bennet

In recent crypto news, Ethereum's impending switch from Proof of Work (PoW) to Proof of Stake (PoS) has grabbed a lot of attention. This shift is part of Ethereum's much anticipated Ethereum 2.0 upgrade.

So, what is Proof of Stake (PoS)? It is a consensus algorithm for public blockchains that operates by selecting validators in a pseudo-random way to create a new block, based on their wealth, also defined as 'stake'. Unlike PoW, which relies on miners to solve complicated mathematical problems, PoS chooses the creator of a new block based on the individual’s stake.

This switch is expected to bring significant benefits to the Ethereum network, such as increased security, reduced risk of centralization, and more energy efficiency. However, it also brings its own set of challenges and concerns, especially related to the fact that someone with a larger stake has a higher chance of being chosen to validate and create new blocks.