What Is Delegated Proof-Of-Stake

What Is Delegated Proof-Of-Stake?

Delegated proof-of-stake (DPoS) is a consensus protocol that provides dependable verification and approval of blockchain transactions. Essentially, DPoS is an extension of the original proof-of-stake protocol. It allows blockchains to change network parameters such as fee schedules, block intervals, and transaction sizes without the need to create a hard fork. But how can network parameters change without a hard fork? In a DPoS environment, network users elect delegates to vote on these changes.

How Does it Work?

Each network user is allowed to certify their trust in one of the delegates. The network user and the delegate will validate transactions and generate blocks together. Several delegates are selected by the network to remain decentralized. Network users cast a vote to decide how many delegates are needed to maintain the appropriate level of decentralization. The selected delegates are allowed to produce blocks by verifying all transactions collected from the previous block. If all transactions are verified and signed, a reward is shared between the network user and the delegate.

The main advantage of DPoS is the fact that it requires less financial input. In other words, it’s a cheaper process compared to PoS blockchains. As a result, DPoS is more financially inclusive (i.e. more users can participate in block production). This means that it has a higher level of decentralization because more people are verifying transactions. Also, DPoS does not require a great deal of power to run the network, thus making it more long-term sustainable.

Despite all of its mundane jargon and complex language, DPoS is nothing more than another attempt to find a better way of verifying transactions on the blockchain. In terms of scalability improvement, DPoS falls into the same category as PoW, PoS, LPoS, SegWit, and Lightning Network.

The crypto community has some of the brightest minds. They will leave no stone unturned in their effort to transform Bitcoin and other cryptocurrencies into a legitimate method of payment. However, before digital currencies can join other global payment processors, they must be scalable. DPoS is a step in the right direction.

Brief Summary of Delegated Proof-Of-Stake

  • DPoS is an extension of the original proof-of-stake protocol.
  • It allows blockchains to change network parameters without a hard fork.
  • A hard fork is avoided because network users elect delegates to vote on such changes.
  • Each network user is allowed to certify their trust in one of the delegates.
  • The network user and the delegate will validate transactions together.
  • To remain decentralized, several delegates are selected by the network.
  • The selected delegates are allowed to produce blocks by verifying all transactions.
  • If all transactions are verified, a reward is shared between the user and delegate.
  • The main advantage of DPoS is the fact that it requires less financial input.
  • Consequently, there is a higher level of decentralization.
  • DPoS is more sustainable because it requires less power.

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