How staking incentivizes trust without burning energy
Summary
Staking is a mechanism that allows users to operate blockchains by putting down their funds as collateral, thereby incentivizing good behavior. It provides two types of security: computer science-based guarantees and economic disincentives for malicious actions. If a majority of staked tokens behave properly, the system operates correctly; if not, the value of the tokens may decrease, penalizing bad actors. The discussion contrasts proof-of-work (PoW) and proof-of-stake (PoS), highlighting trade-offs in cost, control, and decentralization. Staking also plays a crucial role in tokenomics and system design, influencing fee mechanics and inflation controls.
