Proof-of-Stake Architecture

Definition ∞ Proof-of-Stake architecture is a type of consensus mechanism used in blockchain networks to validate transactions and create new blocks. In this system, participants known as validators stake a certain amount of the network’s native cryptocurrency as collateral to participate in the block creation process. Validators are chosen to create new blocks based on the amount of cryptocurrency they have staked and other factors, such as their age of stake. This mechanism offers greater energy efficiency and scalability compared to Proof-of-Work systems, while still providing robust security.
Context ∞ The transition of major blockchains like Ethereum to Proof-of-Stake architecture has significantly shifted discussions around energy consumption and network scalability in the digital asset space. This architectural change aims to reduce environmental impact and enhance transaction throughput, supporting broader adoption of decentralized applications. Debates continue regarding the centralization risks and security implications of various Proof-of-Stake implementations.