Those are valid concerns. Centralization is somewhat subjective, for instance Bitcoin has more that 60% of miners concentrated in China, I wouldn’t call that exactly decentralized. On the contrary if Bitcoin was proof-of-stake, probably most percentage of validators would be concentrated in US and Europe, where people can buy BTC more easily and have relatively more purchasing power.
So, how do PoS and PoW work?
In PoS the network is secured by people with the most stake (coins or tokens), they are the ones that decide which transactions are included in each block. A malicious actor would have to purchase more coins than those collectively held by most people, which would increasing the price, thus making more difficult to get the stake needed. Then when the network is attacked they would lose money if the price dumps or their reward is slashed (burned). Attacking the network would be attacking their own stake, and there isn’t much incentive for doing that.
In PoW, the network is secured by computational power. Those with the faster or cheaper hardware can have the majority of computational power. Malicious actors can attack the network without having a considerable stake, and they can always perform an attack since they don’t lose that power in the process.
And how does PoS compare to PoW?
Some people say PoW is wasteful, while others say …and so is Christmas lights. Meaning, those concerned about all that energy wasted by PoW should try to do something about Christmas lights too. Seriously speaking though, most energy in PoW is coming from renewable sources these days, but there is still the centralization of mining power in places where hardware is cheaper for PoW, and in places where people have more purchasing power in PoS, so it’s and open discussion if your are concerned about centralization of the network. Something that should have a more noticeable impact, however, is the effect in price. With PoW there is always a downward pressure on the price, i.e. the more people mine the more the price moves downwards. Other way to see this is, the more the price increases, more equipment that could be inefficient or expensive to maintain could be used in mining. With PoS, the opposite is true, the more people is trying to use their stake for validation, the more the price increases as a consecuente of those coins being temporary removed from circulation.
PoS could be more beneficial than PoW for those with a stake in the network.