Assets, Ethereum

What Is Proof-of-Stake Ethereum?

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference. In order to achieve this, Ethereum uses a proof-of-stake consensus algorithm.

Under proof-of-stake, miners are not rewarded for validating blocks of transactions. Rather, they are chosen in a pseudorandom way by the protocol to validate blocks.

The probability of a miner being chosen to validate a block is proportional to the amount of ETH that the miner has staked—that is, the number of ETH that the miner has put up as collateral.

NOTE: WARNING: Investing in Proof-of-Stake Ethereum can be risky and speculative. There is no guarantee of return on investment, and investors should do their own research and exercise due diligence before investing. Additionally, Proof-of-Stake Ethereum has not yet been released and its features may change significantly when it is launched. Investing in this new technology is highly speculative and comes with the potential for financial loss.

If a miner attempts to validate a block that contains invalid transactions, they will lose their entire stake. This provides an economic incentive for miners to only validate blocks that contain valid transactions.

The proof-of-stake algorithm used by Ethereum is called Casper. Casper is based on research by Vitalik Buterin, one of the co-founders of Ethereum.

Under Casper, miners are not rewarded for validating blocks of transactions.

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