BC4: How a shared ledger agrees: blocks, consensus and finality
Proof of stake
🎯You'll be able to
Explain how proof of stake chooses blocks, how dishonesty is punished, and how Ethereum uses it.
🏠The everyday picture
Members who want to keep the register must leave a deposit with the group. Caught writing two different pages at once, they lose part of it.
📘What it really is
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Validators lock up (stake) the network's currency. The protocol picks validators to propose blocks and others to vote (attest) for them.
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Slashing: a validator that signs two conflicting blocks or votes loses part of its stake. Dishonesty costs money.
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Ethereum: moved from proof of work to proof of stake in September 2022 ("the Merge"). A slot is 12 seconds, an epoch is 32 slots (6.4 minutes), and blocks are usually final after about two epochs (about 13 minutes).
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Trade-offs: far less energy than proof of work; security comes from the value at stake. Risks include concentration of stake in a few large providers.
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Other designs: delegated proof of stake and many variants exist. Read each chain's documentation rather than assuming.
📝A worked example
Input: a validator on Ethereum signs two different blocks for the same slot.
Steps:
- Another validator notices the two signed blocks and submits them as evidence.
- The protocol slashes the dishonest validator: part of its stake is destroyed and it's forced to leave.
- Honest validators continue; the network keeps one chain.
Expected output: dishonesty costs more than it can gain, as long as enough stake is honest.
🌍Where it's used
- Ethereum since September 2022.
- Many newer chains use proof of stake variants.
- Staking services run validators for others.
📝Case scenario
A staking provider ran the same validator keys on two machines "for backup". Both signed blocks for the same slot, and the validators were slashed. The lesson: a validator's key must sign from one place, with safeguards against double signing.
🖱️Try it
How many slots happen in one hour on Ethereum? Success: 300, at one every 12 seconds.
⚠️Common mistakes
- Running one validator key in two places. Sign: slashing. Fix: one active signer, with protection against double signing.
- Assuming proof of stake has no costs. Sign: "it's free security". Fix: it costs locked capital and has its own risks.
- Copying numbers between chains. Sign: 12-second slots assumed everywhere. Fix: check each chain's documentation.
🛠️For your project
The practice network doesn't use stake: one node makes blocks at once. Project 3's notes should say confirmations behave differently on a public network.
✅Quick check
What is slashing?
Show the answer
Destroying part of a validator's stake when it signs conflicting blocks or votes.
About how long does an Ethereum block usually take to become final?
Show the answer
About two epochs, roughly 13 minutes.