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What Is Proof of Stake? How Validators Secure Ethereum

Proof of stake is a consensus method in which validators put up their own coins as collateral that can be taken if they act dishonestly, and are chosen to propose and approve blocks instead of competing to solve a hash puzzle.

Key takeaways

The idea

Proof of work secures a chain by making attackers spend real resources on hashing. Proof of stake secures it differently. ethereum.org explains it as a way to prove that validators have put something of value into the network that can be destroyed if they act dishonestly. The value at risk is the validator's own staked coins.

How Ethereum does it

Ethereum switched from proof of work to proof of stake in 2022. To become a validator, a user deposits 32 ETH into the deposit contract and runs the required software. In each slot, one validator is randomly chosen to propose a block, and a committee of validators is chosen to vote on whether the block is valid. Honest participation earns rewards.

Penalties

Validators can lose coins for misbehaviour. Slashing destroys some or all of the staked ETH when a validator acts in ways that threaten the network, such as signing conflicting blocks. Smaller penalties apply for being offline. This is the economic deterrent that replaces the cost of electricity in proof of work.

Trade-offs

Proof of stake uses far less energy than mining and lets more people take part without specialised hardware, but it has its own debates: how stake is distributed, how to handle validators who go offline, and whether wealth concentrates. Because the security budget is the stake, its value relative to the cost of an attack matters. For users of coins, the difference mostly appears in how rewards are earned. Miners are paid for hashing work, while validators are paid for staking, and Scrypt coins such as Litecoin and Dogecoin remain proof of work.

Example

A validator deposits 32 ETH and is randomly chosen to propose block 20,000,000. A committee votes it valid. If the validator had instead signed two conflicting blocks, part of its 32 ETH could be destroyed.

Put it into practice

Compare how networks pay for security

Mining coins such as Litecoin pay for work; staking coins pay for locked capital. Use the mining calculator to see what Scrypt hardware earns.

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Sources and verification

Last reviewed 2026-10-02 by the Scrypt Wallet team. The factual claims on this page, and where each comes from:

  1. Proof of stake proves validators have put something of value into the network that can be destroyed if they act dishonestly. [1]
  2. A validator must deposit 32 ETH into the deposit contract and run the required software. [1]
  3. One validator is randomly selected to propose a block in each slot and a committee votes on its validity. [1]
  4. Proof of stake is a consensus mechanism in which validators are chosen based on the stake they hold. [2]

Sources

  1. Proof-of-stake · ethereum.org · secondary source
  2. Proof of stake · Wikipedia · secondary source

Primary sources are protocol papers, specifications, source code or a project's own documentation; secondary sources are wikis and explainers. We checked each claim against the source text on the review date. Found an error? Tell us and we will correct it.

Frequently asked questions

Is proof of stake more energy efficient?

Yes. It does not rely on large-scale hashing, so energy use is far lower than for proof of work.

Do Litecoin and Dogecoin use proof of stake?

No. They use proof of work with the Scrypt algorithm.

What is the downside?

Concerns include stake concentration and the need to design penalties carefully.

Related terms

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Written by the Scrypt Wallet team · Updated 2026-10-02. General education, not financial, tax or legal advice.