Entry barriers

Unlike PoW, PoS blockchains do not require expensive, sophisticated equipment or access to vast amounts of low-cost energy. However, some entry barriers still make many PoS prohibitively expensive and overly complicated:

  • The staking requirements (i.e., 32 ETH are required to run a single Ethereum 2.0 node, worth over $130k as of Oct 2021)

  • The expertise needed to run and secure many validator nodes

  • Access to inexpensive and continuous wifi, which can be prohibitive for node operators in countries and regions of insufficient coverage

  • Difficulty assessing the various PoS protocols in search of the better staking gains

  • Low flexibility to switch between different blockchains as the coins are locked or bonded for a specified period

  • Loss of liquidity when staking

  • Other risks (downtimes, slashing, hacks, network attacks, etc.)

Ethereum, the second-largest cryptocurrency with a devoted network of developers and supporters, has only 7.8 out of 117.8 million Eth staked (as of Sept 2021), that’s around 6.6%.

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