Proof-of-work and proof-of-stake are the two major cryptocurrency consensus mechanisms, or the ways cryptocurrency transactions are validated. Proof-of-work is the older of the two (used by Bitcoin, Ethereum 1.0, etc.) and it achieves consensus by requiring participants to spend computational power — and electricity — in order to generate a new valid block. Meanwhile, the newer consensus mechanism, proof-of-stake (which powers Ethereum 2.0, Cardano, Tezos, and others) requires participants to stake crypto - or put cryptocurrency as collateral - for the opportunity to successfully approve transactions. Proof-of-work is more secure than proof-of-stake, but it’s slower and consumes more energy. Proof-of-work is also more open and decentralised, while proof-of-stake can tend toward centralization.