What is a Delegated Proof-of Stake (dPOS)?
Delegated Proof-of-Stake (DPoS) is a consensus mechanism used in some blockchain networks to validate transactions and create new blocks. It is a variation of the Proof-of-Stake (PoS) consensus mechanism and was first introduced in 2014 as a way to address some of the limitations of PoS.
In a DPoS system, a group of validators, also known as witnesses or delegates, are elected by the network's stakeholders to validate transactions and create new blocks. The witnesses are chosen based on the number of votes they receive from the stakeholders, and the number of votes a witness receives is proportional to the amount of the network's native cryptocurrency they hold.
Once elected, the witnesses are responsible for verifying transactions and adding them to the blockchain. Unlike in a PoS system, where validators are selected randomly, in a DPoS system, the witnesses are known in advance, and their identities are publicly disclosed. This helps to increase transparency and accountability in the validation process.
One of the key benefits of DPoS is that it is more energy-efficient than other consensus mechanisms, such as Proof-of-Work (PoW). This is because it requires less computational power to validate transactions, as only a small group of witnesses are responsible for doing so. Additionally, DPoS is generally faster than PoS and PoW, as it can process transactions more quickly and with fewer delays.
Simplified Example
Delegated Proof-of-Stake (DPoS) is like choosing a class leader to represent everyone in the class and make decisions for the group. The class leader is selected by the students, and can be changed if the students are not happy with the job they are doing.
In the same way, in a DPoS system, token holders can vote for delegates, who are responsible for making decisions on behalf of the network. The delegates are chosen based on how many votes they receive, and can be changed if the token holders are not happy with their performance. This allows for a more democratic and efficient way of making decisions, because the token holders can directly influence the actions of the delegates. Just like how the class leader makes decisions on behalf of the class, the delegates make decisions on behalf of the network.
Who Invented the Delegated Proof-of-Stake (DPoS)?
Daniel Larimer is a software engineer and blockchain visionary renowned for his innovative contributions to the crypto sphere. His impact resonates particularly in the development of Delegated Proof of Stake (DPoS), a consensus algorithm aimed at improving blockchain scalability and efficiency. Larimer's exploration of alternative consensus mechanisms led to the conceptualization of DPoS in 2014, intending to address the energy-intensive nature of traditional Proof of Work (PoW) systems. DPoS introduces a democratic approach where token holders vote for delegates to validate transactions and produce blocks. Through his work, Larimer envisioned a governance system that maximizes network throughput while ensuring decentralization, enabling faster and more sustainable blockchain operations.
Prior to DPoS, Larimer played a pivotal role in the creation of several blockchain projects, including BitShares and Steemit. His pursuit of scalable and decentralized systems remains a cornerstone of his contributions, continually shaping the evolution of blockchain technology and fostering innovative consensus mechanisms. Daniel Larimer's inventive thinking and relentless pursuit of efficient and scalable blockchain solutions have significantly influenced the crypto landscape.
Examples
EOS: EOS is a decentralized blockchain platform that uses a Delegated Proof-of-Stake (DPoS) consensus mechanism to validate transactions and secure the network. In this system, token holders can vote for a limited number of block producers, who are responsible for validating transactions and adding blocks to the blockchain. The block producers are incentivized to perform their duties in a responsible and efficient manner, as they are subject to regular vote-based elections and can be replaced if they fail to perform.
TRON: TRON is a decentralized blockchain platform that uses a Delegated Proof-of-Stake (DPoS) consensus mechanism to validate transactions and secure the network. In this system, token holders can vote for Super Representatives, who are responsible for validating transactions and adding blocks to the blockchain. The Super Representatives are incentivized to perform their duties in a responsible and efficient manner, as they are subject to regular vote-based elections and can be replaced if they fail to perform.
Lisk: Lisk is a decentralized blockchain platform that uses a Delegated Proof-of-Stake (DPoS) consensus mechanism to validate transactions and secure the network. In this system, token holders can vote for Delegates, who are responsible for validating transactions and adding blocks to the blockchain. The Delegates are incentivized to perform their duties in a responsible and efficient manner, as they are subject to regular vote-based elections and can be replaced if they fail to perform. Delegates also receive a portion of the network fees as a reward for their work.
Related terms
Proof-of-Burn (PoB): Proof-of-Burn (PoB) is a consensus mechanism used in some cryptocurrencies to determine which nodes (miners) are eligible to create new blocks and add them to the blockchain.
Proof-of-Work (PoW): Proof-of-Work (PoW) is a consensus algorithm used in blockchain technology to validate transactions and secure the network.