In the current iteration of Ethereum (eth1), new blocks of transactions are created using Proof of Work, a consensus mechanism in which specialized computers race to be the first to solve a difficult math problem.

Ethereum 2.0 (eth2) will be a Proof of Stake network, in which holders stake their coins to become validators eligible to propose and verify blocks and receive rewards for it. These validators are disincentivized from attempting to cheat by a system of penalties for engaging in malicious behavior.

Because staking does not require any specialized hardware, the barrier to entry to becoming a block producer is dramatically lowered, and anyone holding ETH can participate in securing the network and earning rewards.

Did this answer your question?