Proof of Work vs Proof of Stake: the difference and what it means for mining
Proof of Work and Proof of Stake are two ways a cryptocurrency network agrees on the next block. With Proof of Work (PoW), the block is decided by computational work – miners with ASIC miners consume electricity, and whoever finds the right hash first gets the reward. With Proof of Stake (PoS), there is no mining: blocks are created by validators who have staked their coins in the network. That is why ASIC mining only concerns PoW coins such as Bitcoin, Litecoin or Kaspa.
Summary
- PoW: security is paid for with electricity and hardware. Bitcoin, Litecoin, Dogecoin, Kaspa, Zcash, Monero and others are mined.
- PoS: security is paid for with staked coins. This includes Ethereum, Solana and Cardano.
- Ethereum switched from PoW to PoS on 15 September 2022 (the so-called Merge). The network's energy consumption fell by roughly 99.95% and Ether mining on graphics cards came to an end.
- For an ASIC owner, what matters is that their coin stays on PoW. No such change is expected for Bitcoin.
How Proof of Work works
A miner assembles a block from pending transactions and then changes one number in its header until the block hash comes out below the target value. It is a pure lottery with a huge number of attempts: an Antminer S21++ manages 235 trillion of them per second. Whoever succeeds first adds the block to the blockchain and receives the reward – for Bitcoin currently 3.125 BTC plus fees.
The network itself adjusts the difficulty so that blocks arrive at a steady pace (every 10 minutes for Bitcoin). When more miners join, the difficulty rises. An attacker would therefore need more hashrate than all honest miners combined, which would cost billions in hardware and electricity.
How Proof of Stake works
In PoS, instead of computing, you “stake” your own coins. On Ethereum, anyone who stakes at least 32 ETH becomes a validator (since the Pectra upgrade in May 2025, a single validator can hold up to 2,048 ETH). Every 12 seconds the network randomly selects who will propose the next block, and the other validators confirm it by voting.
For honest work, a validator receives a reward in ETH. If it cheats, for example by signing two different blocks, the network takes away part of its staked coins (so-called slashing). Computing power plays no role here – an ordinary server with a constant connection is enough.
PoW and PoS at a glance
| Proof of Work | Proof of Stake | |
|---|---|---|
| Who creates blocks | miners | validators |
| What is needed | computing power (ASIC, GPU, CPU) and electricity | staked coins and an ordinary server |
| What an attacker risks | losing money spent on electricity and hardware | losing the staked coins |
| Energy consumption | high | low |
| Examples | Bitcoin, Litecoin, Dogecoin, Kaspa, Zcash, Monero | Ethereum, Solana, Cardano |
The 2022 Ethereum Merge: what happened to miners
For years Ethereum was the biggest coin for graphics card mining. At PC Praha, the first Ether was mined back on Radeon R7 280 and R9 290 cards. In 2021 we doubted in this article that the switch to PoS would really happen – but on 15 September 2022 it did, and Ether mining ended overnight.
The hashrate of graphics cards moved to smaller PoW coins, mainly Ethereum Classic, Ravencoin and others. Their difficulty rose sharply and GPU earnings fell to a fraction of what they had been. The current situation is shown in our graphics card profitability table.
Why this matters for miners
An ASIC miner can only run one algorithm. If a network switches to PoS or changes its algorithm, the machine becomes useless for it and is left with only other coins using the same algorithm. Before buying a miner, find out how big the network is, how many other coins use the same algorithm, and whether the developers are planning a change. For Bitcoin, Litecoin and Dogecoin, PoW has been part of the rules from the start and no switch is expected.
Related terms
- Which cryptocurrencies can be mined – PoW coins by algorithm.
- ASIC miner – hardware for Proof of Work.
- Halving – how the block reward is reduced in PoW networks.
What next
If you are considering PoW mining, compare the current earnings of machines in our ASIC miner profitability table.
Sources
Frequently asked questions
Can Ethereum still be mined?
Will Bitcoin switch to Proof of Stake?
Is staking the same as mining?
What happened to graphics cards after Ethereum's switch?
This text was prepared with the help of AI. Facts, figures and procedures were checked by Yegor.
