Mining & Validation, Conceptually

Before a transaction gets added to the blockchain, the network has to agree it's legitimate — that the sender actually has the funds and hasn't already spent them elsewhere. This confirmation process is often called mining or validation, depending on the specific blockchain, and it's what turns a pending transaction into a permanent part of the record.

Two common approaches exist. In proof of work, computers called miners compete to solve a difficult puzzle, and whoever solves it first gets to add the next block and earn a reward — this is the original approach, used by Bitcoin, and it consumes a significant amount of computing power and electricity. In proof of stake, validators instead lock up some of their own cryptocurrency as a deposit, known as staking, and the network selects among them to confirm the next block, using far less energy.

Here's a simplified look at what a miner or validator is actually rewarded for.

New block contains 500 pending transactions
Miner/validator checks that each one is valid
Block gets added to the chain
Miner/validator receives a reward: newly created coins + transaction fees

The process of confirming transactions and adding them permanently to a blockchain is often called mining or ____.

What is the basic difference between proof of work and proof of stake, conceptually?

Validators or miners are typically rewarded in some way for confirming transactions correctly.