Proof of work and proof of stake are two different approaches blockchains use to reach agreement on which transactions are valid, a problem known as consensus. Bitcoin uses proof of work, where miners compete using computing power to solve a puzzle, and the winner adds the next block in exchange for a reward.
Proof of stake, used by networks like Ethereum since 2022, instead selects validators largely based on how many coins they have locked up, or staked, as collateral. Validators who approve fraudulent transactions risk losing part of their staked coins, which creates a financial incentive to act honestly.
The practical difference beginners notice most is energy use. Proof-of-work mining consumes large amounts of electricity because it relies on raw computing power, while proof-of-stake networks use a small fraction of that energy since they do not require solving energy-intensive puzzles.