What Is a Cryptocurrency
Validators don't outwork the network. They post their own capital.
Mining secures a chain with energy. Proof-of-stake secures it with money that can be taken away. Far less electricity — and a new question about who owns the capital that now holds the network up.
The problem
A validator tries to have it both ways.
It signs two different blocks at the same height and sends one to each half of the network. In mining that costs electricity. Here it costs something else.
Validator A · in the active set
ACTIVEThe units on this bar exist so the mechanism is visible. Every network sets its own penalty in its own rules — no real rate, minimum or yield is shown anywhere in this lesson.
Block A · height 812
Signed by Validator A. Sent to one half of the network.
Block B · height 812
Also signed by Validator A. Different contents, same slot.
Validator A has deposited its own coins to take part. Press Propose two conflicting blocks.
That penalty is called slashing: a hard sanction in which a validator loses part of its deposited stake and can be removed from the set. Nobody had to out-compute the cheat — the other validators simply saw two signatures for one slot, and the rules did the rest. Attacking becomes an economic decision rather than a technical one, because real capital is on the table.
Wasted energy and no block reward. The miner burns electricity it has already paid for, the network rejects the block, and that is the end of it. Nothing the miner deposited is taken, because it deposited nothing.
The stake itself. Part of the deposited capital is removed by the protocol and the validator can be ejected. The threat is not a wasted bill — it is the collateral that bought the seat in the first place.
The definition
Three things staking is not.
Tap each card for what is actually going on.
Hands on
Two answers to the same security question.
Switch between them. Same four rows, same order — only the resource changes.
Proof-of-Work
SECURED BY ENERGYNeither column is the winner — they buy the same security with a different resource.
The bridge
The cycle every validator runs.
Nobody appoints themselves. The network selects, and then it checks.
Proof-of-stake saves an enormous amount of energy and opens new questions in the same move: whoever holds a lot of capital can hold a lot of influence, and large staking providers can bundle a great deal of stake. A network can be proof-of-stake by design and still look centralised in practice. Mining and validators are two answers to the same question — which leads straight into the next lesson, the blockchain trilemma.
Check yourself
Five questions.
Answers come straight from this lesson. Submitting completes it.