Every blockchain has it’s own consensus mechanism protocol. These protocols are used in order to validate the transactions in the blockchain network. For example, we have Proof-Of-Work (PoW) as a consensus mechanism in the case of Bitcoin Blockchain. Similarly, we have another consensus protocol named Proof-Of-Stake (PoS)used by various other blockchain. But both of these consensus mechanisms have their own pro’s and cons. New blockchains are coming with more advanced consensus protocols. One of them is Delegated Proof Of Stake (DPoS).
What is Delegated Proof of Stake (DPoS)?
Delegated Proof Of Stake (DPoS) is an advancement to current PoS protocol. In the original Proof-of-Stake consensus mechanism, a crypto user can stake his/her cryptocoins to the respective blockchain network, thereby earning the right to verify transactions, forge blocks, and earn associated rewards.
As mentioned above, DPoS is an advancement to PoS by having all the features of PoS along with some additional features. DPoS is like a digital democracy which leverages the power of stakeholder to resolve any consensus issued by voting in a fair and democratic way.
Delegated Proof of Stake is the brainchild of Dan Larimer, the creator of Bitshares. Bitshares was established in 2014 and has a fairly active community. Dan realised the possibility of centralization in Bitcoin mining and the potential environmental impact of Proof of Work. Dan believes that DPoS has the following benefits over traditional PoW and PoS systems:
Delegated proof of stake uses real-time voting combined with a social system of reputation to achieve protocol compared to all others. Every token holder in the DPoS consensus blockchain network can exercise a degree of influence about what happens on the network.
DPoS seeks to achieve consensus fast and more efficiently than original PoS. It has been discussed below
How Delegated Proof Of Stake (DPoS) Works?
The functioning of Delegated Proof Of Stake (DPoS) has been explained and breaked down to following stages:-
In Delegated Proof Of Stake (DPoS) consensus protocol, the users have to ‘vote’ to select ‘witnesses’ (who are other users that they trust to validate transactions). The witnesses who have got the most votes, earns the right to validate and verify the transactions in the blockchain network. The Users can even delegate their voting power to other users, whom they trust to vote for witnesses on their behalf.
But, votes from users with large stakes can result in users with relatively small stakes being elevated to the top tier of witnesses as votes are weighed according to size of stake.
Each blockchain has their own set of rules. Generally, the number of witnesses in the top tier is capped at a certain number (discussed below, keep reading). These witnesses are responsible for validating and verifying the transactions, creating blocks, and are in return rewarded with crypto coins as fees.
Delegates
Delegates are the trusted parties responsible for maintaining the network. The delegates looks after the governance and performance of the entire blockchain protocol, but do not play a role in transaction validation and block production. For example, the delegates can propose changing the size of a block, or the amount a witness should be paid in return for validating a block. Once the delegates propose such changes, the blockchain’s users vote on whether to adopt them.These delegates are also elected by users through voting.
In some DPoS versions, a delegate needs to show commitment by depositing his funds into a time-locked security account (which is confiscated in case of malicious behavior). This version of DPoS is often referred to as deposit-based proof of stake.
To summarise the roles of delegates are:-
- Ensuring their node is always up and running.
- Collecting the transactions across the network into blocks.
- Signing and broadcasting those blocks, validating the transactions.
- If there are issues in regard to consensus, DPoS allows these to be resolved in a fair and democratic way.
Blockchain Networks Using Delegated Proof Of Stake (DPoS) Consensus Algorithm | DPoS Coins | DPoS Cryptocurrencies
Following are some blockchain networks that are current using Delegated Proof Of Stake (DPoS) Consensus mechanism:-
- EOS
- Lisk
- Cardano
- Bitshares
- Steem
- ARK
- Tezos
As mentioned above that each DPoS has it’s own numbers of block producers, following are the numbers for some of the more well-known DPoS chains:
- EOS- 21
- Lisk- 101
- Bitshares-101
- Steemit-21
- Ark-51
DPoS faster than tradition Proof of Work and Proof of Stake systems.
Similarly, no special and expensive equipments and hardwares are required to become user, witness or even delegate. A normal technologically updated computer is enough.
DPoS is the next big thing in the evolution of consensus mechanism protocols.Delegated Proof of Stake consensus focuses its efforts on improving scalability while sacrificing some elements of decentralization.
Which method will rise to the top? Will it be PoW or PoS or DPoS or any other? Let us know in the comments section below
Which method will rise to the top? Will it be PoW or PoS or DPoS or any other? Let us know in the comments section below
