The cryptocurrency is secured by cryptography. Like traditional blockchains, Ethereum blockchain uses the Proof of Work (PoW), where participants are required to perform work in order to approve transactions within the network. In contrast to mining bitcoin, which consumes enormous amounts of energy, Ethereum hard forks from proof-of-work algorithm—which works sort of like a competitive lottery system—into proof-of-stake algorithm—a more environmentally friendly alternative called Vitalik Buterin’s proposed Casper Protocol. Proof-of-stake means that developers and miners earn Ether based on how much money they have put into their address. The coin supply is fixed at premine amount of 200 million coins after launch at ETH’s genesis block.
So what is proof of stake? Check our comprehensive guide for more info about PoS vs PoW!