How Blockchains Reach Consensus: Proof of Work vs. Proof of Stake
Two families of consensus algorithms, compared without jargon.
Consensus is the process by which a decentralized network agrees on the next block of transactions. Without a central operator, the network needs a rule that determines who gets to propose a block and how everyone else verifies it.
Proof of Work asks participants — miners — to spend computing power solving a hashing puzzle. The first to solve it proposes the next block. The cost of that computation is what makes rewriting history expensive, and therefore the network hard to tamper with.
Proof of Stake replaces computation with an economic commitment. Validators lock up the network's own token as collateral. The protocol selects validators to propose and attest to blocks, and misbehavior can cost them part of their stake.
Neither approach is universally better. Proof of Work is battle-tested and hardware-secured. Proof of Stake is more energy-efficient and enables faster finality. Each involves different trade-offs around hardware, capital, and governance.