PoW and PoS
PoW and PoS are two ways a blockchain decides who adds the next block. In PoW, miners compete with computing power; in PoS, validators lock coins as collateral.
How it works
Proof of Work: miners try billions of guesses to solve a hard puzzle. Whoever finds the answer first adds the block and earns the reward. Rewriting history is expensive, because an attacker would have to redo all that work.
Proof of Stake: validators lock their coins as collateral (a stake). The network picks who proposes a block, and other validators check it. If a validator cheats, for example by signing two conflicting blocks, the network burns part of their stake. This is called slashing.
PoW uses a lot of electricity but has the longest track record. PoS uses very little energy, but its security rests on the value of the collateral. Ethereum moved from PoW to PoS in September 2022 (The Merge), while Bitcoin stays on PoW.
Bitcoin gets its protection from miners doing work: rewriting history is expensive. A PoS network protects itself differently: a dishonest validator has something to lose, because the collateral can be cut.
To run your own validator on Ethereum, you lock 32 ETH. The validator earns ETH for proposing and attesting to blocks, and loses part of those 32 ETH for breaking the rules.
Do not mix up staking on an exchange with running a validator. On an exchange you hand your coins to a service, and the risks are different: the exchange can freeze withdrawals or go bankrupt, and the yield is not guaranteed. Another mistake is assuming PoS is automatically safer or "better" than PoW. They are different trade-offs between energy use, decentralisation and what the security rests on.
Questions and answers
What are PoW and PoS in simple terms?
They are the rules a network uses to choose who writes the next block. In PoW the winner is whoever spent computing work; in PoS it is someone who locked up coins as a stake.
Is Bitcoin PoW or PoS?
Bitcoin uses Proof of Work, and miners add the blocks. Ethereum has used Proof of Stake since September 2022.
Is PoS better than PoW?
PoS uses thousands of times less energy and needs no expensive hardware. PoW, however, has a longer real-world track record, and in PoS influence grows with how many coins you hold.
Related terms
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Updated: 2026-10-19