liveBook · Manning

Proof-of-stake

As explained in Investing for Programmers

A proof-of-stake consensus mechanism selects validators according to the cryptocurrency they commit and other protocol rules to confirm transactions and produce blocks.

Proof of stake (PoS) validates blockchain transactions by having cryptocurrency holders lock assets to support the network. Validators are selected using stake size or other protocol factors, confirm transactions, propose blocks, and earn token rewards. Compared with proof of work, PoS uses less energy but requires committed capital and exposes participants to token devaluation. section 5.3.2 section 5.3.3

Participation usually follows one of two practical paths:

  • Run a validator node, accepting the hardware, software, time, and minimum-stake requirements. section 5.3.3
  • Delegate cryptocurrency to a third-party validator, trading some rewards for lower setup and maintenance commitments. section 5.3.3
  • Treat advertised annual percentage yields cautiously: newly created tokens can reduce the value of existing holdings, while fraud and market risks remain. section 5.3.2 section 5.3.3
Table 5.2 Staking rewards
Cryptocurrency
Average staking rewards (APY) in %
Ethereum (ETH)
4–6
Cardano (ADA)
4–6
Solana (SOL)
6–8
Polkadot (DOT)
~14
Avalanche (AVAX)
8–12

Compare indicative staking rewards across Ethereum, Cardano, Solana, Polkadot, and Avalanche; these percentages do not guarantee investment returns. section 5.3.3

How Investing for Programmers covers it

How deep it goes
Explains validator selection, block proposals, delegation, minimum stake, commissions, and token devaluation without detailing consensus internals.
Examples
Uses Ethereum’s 32 ETH validator threshold, delegated staking, hardware-ledger software, and comparative cryptocurrency APYs.
What it assumes
Assumes cryptocurrency ownership and introduces the minimum-stake, validator, delegation, and reward concepts needed to participate.
What you can do after
Operate or configure staking through a validator node, delegation, or hardware-ledger software while assessing costs and risks.
How it connects
Connects proof of stake with blockchain, validators, staking rewards, cryptocurrency, and proof of work.
Cover of Investing for Programmers
liveBookmanning.com
Read Investing for Programmers on liveBook Get the book at manning.com

Also explained in

Compare how 2 books explain proof-of-stake →

Related concepts

This explainer was generated by Manning's knowledge graph from the text of Investing for Programmers. The section links point to the parts of the book it draws on.