How Does Proof of Stake (PoS) Reduce Energy Consumption Compared to PoW?

Proof of Stake (PoS) dramatically reduces energy consumption by replacing computational competition with a system of economic collateral. Instead of miners solving energy-intensive puzzles, PoS selects validators to create new blocks based on the amount of cryptocurrency they "stake" or lock up.

This eliminates the need for vast arrays of powerful hardware, leading to an energy reduction of over 99% in networks like Ethereum after its transition from PoW. Security is maintained as validators are incentivized to act honestly to protect their staked funds.