Among other things, regulators worry about the environmental damage caused by the mechanism bitcoin uses to verify transactions and put new coins into circulation, known as “proof of work” .
To earn the right to add their block to the blockchain—the database that records transactions—miners compete to be the first to solve a complex numerical problem using super-fast computers.
Validators are incentivised to keep the network secure: the more they stake, the more they earn, but the more they also stand to lose if they try to hack the network or validate fraudulent transactions.
In POW, by contrast, miners are encouraged not to cling on to their crypto, since to engage in the mining arms race they constantly need fresh real-world funds to upgrade their hardware.