Proof of work to Proof of stake

Currently with proof of work concept, ASIC specialized hardware and GPUs on PCs are used to mine cryptocurrencies. More specific, GPUs are used for coins like Ethereum and ASICs are used for Bitcoins. Proof of work means that computational power is used for transactions to happen, which method proved to be unsustainable because of the electricity that it needs to make the calculations beside other negative consequences.

The proof of stake model doesn’t use computational power to shift transactions but network itself will verify transactions, or blocks from the transactions, based on miners existing stake of that cryptocurrency. This means that users will use their own coins to validate the transactions on the network and they are responsible for the ordering of the transactions and creating new blocks. Proof of work will help for better energy efficiency and stronger immunity to centralization with increasing of the nodes in the network.

Similar to Proof of work users can join into pools, so they can increase their chance of validating an transaction on the network and reduce the risk of node slashing and downtime. The reward for validating the transaction is split between the users in the pool.

Currently only few cryptocurrencies accept this kind of mining, for Ethereum this will happen on the beginning of 2022 with the upcoming hard fork. This means miners will no longer need GPUs to mine ETH but will lock some of their ETHs for some period of time in order to stake for the transactions.