Ethereum Proof of Stake is a cryptocurrency that is decentralized and rewards stakeholders who validate transactions. This consensus mechanism works by establishing special “checkpoint” blocks periodically. These blocks ensure that the network is secure, by requiring a two-thirds majority of stakes to confirm a transaction. Additionally, these blocks punish those users who add ambiguity to the network.
In order to become a validator, you must have the proper client software. In addition, you must stake 32 Ether (which is roughly $49,000). The Ethereum Foundation restricts the number of validators to a limited number. The validator then receives an amount of Ether for attesting new transactions on the Ethereum network.
The Ethereum network also enables users to send crypto to other users. This makes it possible for anyone to use Ethereum for more than just payments. It allows users to access various decentralized applications, including apps, games, and financial services. It uses a blockchain network, which is a decentralized public ledger that verifies all transactions. There is no central authority that operates the Ethereum network; instead, it is managed by the holders of the distributed ledger. The blockchain ledger contains detailed information on the previous transactions, so all participants are able to see if a new block was legitimate.
The Ethereum network uses 113 terawatt-hours of electricity every year. This is equivalent to the annual electricity use of the Netherlands. Furthermore, a single Ethereum transaction consumes enough electricity to power an average U.S. household for one week. This high energy use has raised the concern of the scientific community. Its use has also been criticized by global lawmakers. For example, China has banned all transactions made with the cryptocurrency in the country until 2021.