$ETH Here are the key details on how Ethereum's proof-of-stake (PoS) system works:
1. Validators: In Ethereum's PoS system, users become "validators" by staking at least 32 ETH in a smart contract. These validators are responsible for verifying transactions and proposing new blocks.
2. Block Proposal: When it's time to add a new block, the protocol randomly selects a validator to propose the next block. The more ETH a validator has staked, the higher their chances of being selected.
3. Block Attestation: After a block is proposed, other validators on the network "attest" to the validity of the block. A committee of 128 randomly selected validators must attest to the block for it to be accepted.
4. Rewards and Penalties: Validators who correctly validate blocks are rewarded with newly minted ETH. However, validators who act maliciously or fail to perform their duties can have a portion of their staked ETH "slashed" as a penalty.
5. Decentralization: PoS aims to be more decentralized than proof-of-work, as it lowers the barriers to entry for validators. Staking pools also allow users to participate without the full 32 ETH requirement.
6. Security: PoS is considered more secure than proof-of-work, as an attacker would need to control over 51% of the total staked ETH to execute a 51% attack, which is economically infeasible.
7. Scalability: Ethereum plans to implement "sharding" in the future, which will split the network into multiple parallel chains to improve scalability and throughput.
Overall, Ethereum's transition to PoS is a major upgrade that aims to make the network more energy-efficient, secure, and scalable compared to the previous proof-of-work model. The successful implementation of PoS has been a long-standing goal for the Ethereum ecosystem.
Sources & References:
[1] Ethereum's big switch to proof of stake, explained - MIT Technology Review Why Ethereum is switching to proof of stake and how it will work (https://www.technologyreview.com/2022/03/04/1046636/ethereum-blockchain-proof-of-stake/)
[2] Proof-of-stake (PoS) - Home | ethereum.org (http://ethereum.org) Proof-of-stake (PoS) | ethereum.org (https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/)
[3] What Is Proof of Stake? - Consensys What Is Proof of Stake? | Consensys (https://consensys.io/blog/what-is-proof-of-stake)
[4] What is proof of stake (PoS)? - McKinsey What is proof of stake? (https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-proof-of-stake)
[5] Ethereum moved to proof of stake. Why can't Bitcoin? Ethereum moved to proof of stake. Why can’t Bitcoin? (https://www.technologyreview.com/2023/02/28/1069190/ethereum-moved-to-proof-of-stake-why-cant-bitcoin/)
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