Relatively new to crypto. Got a loose understanding of the systems.
Trying to differentiate the two but I’m kinda stuck on something. I understand that mining is more energy intensive, as they’re using mining rigs to process transactions.
My confusion stems from how that differs from POS where you still end up using a computer to process transactions. There just happens to be an extra step (32ETH). Which, I guess I should ask just to be sure - are those 32 ETH just parked somewhere as collateral or is it used as part of a liquidity pool?
Of course penalties keep validators in line, but wouldn’t that imply that btc miners have the capability to misbehave in a similar manner to a bad validator (even though they have no stake)?
To me the two methods seem nearly identical. What am I missing ?
Mining does not really “process transactions” in the sense that you might be thinking it does. Fundamentally miners are competing for the chance to create the next block, which of course allows the miner to also include transactions in it.
The actual transaction processing is handled effectively identically in PoS. What has changed is how the network decides, or comes to consensus on, what the next correct (canonical) block is, and who gets to propose (create) it.
The 32 ETH acts as collateral, as you correctly say. If you misbehave by attacking the network, or perform actions that may be interpreted as an attack, a portion of your stake is slashed. The severity of the penalty depends on how many validators have been slashed recently. Similarly, if you are offline and not doing your duties, you very, very slowly bleed away your stake. This incentivizes the participants to do the right thing and to do their duties: both a stick and a carrot, if you will.
In a PoW network, the cost of misbehaving is effectively an opportunity cost combined with the cost of running your infrastructure. Attacking a network costs both the lost rewards, and the electricity/hardware deprecation required to run the attack. However, the network has no real way of otherwise penalizing you, unless it forks off to a different algorithm.
In PoS, malevolent actors can be forcibly exited through protocol-level measures (slashing), or even in a socially co-ordinated hard-fork that removes the malicious actors even if they have not explicitly triggered a protocol violation that would result in a slashing.