How does the network agree? Mining and staking
What you will learn
Explain what miners expend in proof of work and what validators put up as collateral in proof of stake.
A consensus mechanism lets computers agree on transaction order and valid history.
The network must prevent double spending: using the same assets for conflicting payments. Bitcoin uses proof of work (PoW): miners expend computation and energy to propose blocks, which nodes validate. Ethereum uses proof of stake (PoS): validators put up ETH as collateral and help propose and attest to blocks; certain violations can incur penalties. This is not one vote per person. The methods have different costs, incentives and centralization risks. Staking is not a guaranteed bank deposit.
Someone has one unit and submits two transactions trying to spend it twice. The network must agree which transaction is valid rather than accept both.
Explain what miners expend in proof of work and what validators put up as collateral in proof of stake.
Ethereum.org · Consensus mechanisms ↗Check your understanding
Which problem does consensus help solve?
- Spending the same assets twice
- Setting a guaranteed coin price
- Hiding every transaction
Answer and explanation
Spending the same assets twice. Agreement on valid history prevents conflicting payments from both being accepted.
Does staking guarantee preservation of principal and profit?
- Yes, always
- Yes, like bank insurance
- No, price, operational and penalty risks remain
Answer and explanation
No, price, operational and penalty risks remain. Collateral and incentives do not remove risks.
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