In this article, you will learn what does DPoS mean. Blockchain technology has become popular recently by transforming technical infrastructures and systems worldwide. Later, the Proof of Stake mechanism has become popular since the energy consumption of the Proof of Work mechanism has impacts on the environment. Now, an additional layer of PoS consensus mechanism is developed and it is called DPoS. DPoS comes with its own methodology and functionalities.
What does DPoS Mean?
In the blockchain system, DPoS means Delegated Proof of Stake. In the Delegated Proof of Stake (DPoS) mechanism, the validators’ or delegates’ selection is based on voting. It’s an additional layer to the PoS protocol. It works similarly to the real-life election and voting system.
DPoS was coined in 2014 by an American cryptocurrency entrepreneur and software developer, Daniel Larimer. The DPoS maintains an election process where a selected number of delegates (or validators) are chosen. Those delegates are responsible and trusted by the network participants for validating each new block added to the network.
Delegated Proof of Stake (DPoS) is a more democratic version of the Proof of Stake (PoS) mechanism. Both algorithms are used as an alternative to high energy-consuming PoW by Bitcoin.
The elected delegates in delegated proof of stake consensus mechanism serve the role of block producers. Nodes can vote on the delegates by pooling all their tokens in a centralized staking pool, followed by linking the tokens to a particular delegate. Another important highlight of delegated PoS is the fact that users don’t have to transfer their tokens physically from one wallet to another while linking to a delegate. The elected delegates must have the ability to agree on the rejection and approval of transactions.
What are the Advantages and Disadvantages of DPoS?
Benefits of Delegated Proof-of-Stake (DPoS)
Following are the advantages of the DPoS consensus algorithm:
It produces limited incentives for network witnesses as rewards.
It has a higher transaction volume and way less confirmation time.
Time and energy-efficient protocol.
More scalable as it doesn’t rely on the computing powers of a node or system.
It provides more power in the hands of network participants. Hence, it encourages a democratic model.
Here, the delegates (or witnesses) are also the block producers and validators, which increases their interest in the process of verification.
Limitations of Delegated Proof-of-Stake (DPoS)
Following are the disadvantages of the DPoS consensus algorithm:
It’s not applicable to the initial consensus system. It requires a significant amount of pre-existing participants in the network.
With a limited number of witnesses, DPoS can turn the network into centralized control.
Delegates should be honest and well-informed about the network progress, which is hard to find and struggles with the risk of discrepancy.
DPoS systems can discourage beginner network participants with lower coins in the voting process.
Bottom Line
It is reasonable to predict that future blockchain networks would use delegated proof of stake mechanism as their choice of consensus algorithm. So, this article is about what does DPoS mean.
