Ethereum switched from proof-of-work to proof-of-stake in September 2022 via 'the Merge,' cutting energy use by ~99.84%. Validators deposit 32 ETH as collateral and are randomly selected to propose blocks, with slashing penalties enforcing honest behavior. The transition was preceded by two years of parallel Beacon Chain operation. The post also covers economic finality checkpoints (vs. Bitcoin's probabilistic finality), liquid staking risks, restaking via EigenLayer, and alternative consensus mechanisms like DPoS, PBFT, and Proof-of-Authority.
Table of contents
The Security Deposit AnalogyHow Ethereum’s Proof-of-Stake Actually WorksSlashing: Where the Deposit Comes InA Multi-Year Migration, Not a Flip of a SwitchWhy Ethereum Actually Made the SwitchOther Consensus Mechanisms Worth KnowingGet Iduryodhanrao’s stories in your inboxRestaking: The Newest Layer on TopWhere This Bites You in PracticeFinality: A Subtle but Important Difference From Proof-of-WorkThe Mental Model to KeepSources142 Impressions