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Staking: the proof-of-stake parallel
On PoS networks, “mining” is really running a validator:
- Solo staking — run your own node with 32 ETH (Ethereum) and earn rewards; the most decentralized option.
- Liquid staking — protocols like Lido or Coinbase issue a liquid token (LST) representing your stake, so you can stake with less than 32 ETH and stay liquid.
- Staking-as-a-service — custodians and exchanges stake on your behalf for a fee.
- Restaking — re-using staked ETH to secure additional services (e.g. EigenLayer).
Four ways to stake ETH
The attack deterrent flips from electricity cost (PoW) to slashing (PoS): a validator caught misbehaving loses part of its stake. PoS uses far less energy but raises different concerns (liquid staking concentration, validator centralization).
Go deeper — the mining economics rabbit hole
| Dimension | PoW | PoS |
|---|---|---|
| Energy use | High (computation race) | Low (no computation race) |
| Hardware | ASICs / GPUs | Standard servers / cloud |
| Barrier to entry | Hardware + cheap energy | Capital (stake) + ops |
| Attack deterrent | Electricity cost (51% hash power) | Slashing (stake destruction) |
| Decentralization pressure | Mining-pool + farm concentration | Liquid-staking + exchange concentration |
| Examples | Bitcoin, Litecoin, Kaspa | Ethereum, Cardano, Solana, Avalanche |
Confirmation times (how long until a block is considered final) are covered in the Technology unit, with an interactive estimator widget.
Key takeaways
A one-page summary of Mining & Consensus. Print it for quick reference.
- Consensus proofs come in a spectrum: PoW (Bitcoin), PoS (Ethereum), plus PoA, PoH (Solana), and DPoS (Tron/EOS) — each optimizing for different tradeoffs.
- PoW mining = racing to find a hash below a target by changing a nonce; difficulty retargets to keep block spacing constant (Bitcoin ~10 min).
- Hardware evolved CPU → GPU → FPGA → ASIC; ASICs dominate Bitcoin (SHA-256), while GPUs still mine ASIC-resistant algorithms.
- Energy economics drive location: miners follow cheap/stranded energy (excess hydro, flare gas, remote geothermal) — not the cheapest retail electricity.
- Industrial mining today: large farms, publicly-traded miners, colocation/hosting, and mining pools (solo mining is now impractical for Bitcoin).
- PoS “mining” is really running a validator: solo staking, liquid staking (Lido, Coinbase), and staking-as-a-service; the attack deterrent is slashing, not electricity cost.
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