Blockchain and Cryptocurrency Advanced - The Delegated Proof of Stake, DPoS Algorithm

Consensus algorithm is one of the most important aspects of any blockchain. When it comes to blockchain technology, there are various consensus mechanisms that exist and are used for mining and to validate transactions on the blockchain. One of the main purposes of mining or validation is to add new blocks on the chain and secure the network. We all know that bitcoin was the first blockchain to utilize a consensus mechanism known as proof of work consensus mechanism or mining, where the miners make use of high computational mining rigs to solve the complex mathematical problems on the network and to add new blocks and validate transactions, while also getting rewarded. However, over the years, the proof of work consensus mechanism has shown to have a few drawbacks which is why many other consensus mechanisms were created.

The delegated proof of stake (DPoS) consensus mechanism or protocol works differently compared to the famous proof of work. It is was developed Dan Larimer who is popular for his works on bitshares, steem and EOS. The delegated proof of stake (DPoS) consensus mechanism or protocol makes use of an election process in which coin holders in the network, vote for witnesses who are assigned the responsibility of adding new block and validating transactions on the blockchain network. A popular example of blockchain that utilizes the delegated proof of stake consensus algorithm are Steem blockchain, EOS blockchain, Tron blockchain etc.

Since the delegated proof of stake consensus algorithm was created based of the proof of stake and also created as another alternative to the proof of work and proof of stake. It has a lot of benefits and has proven to be a very efficient consensus mechanism. The delegated proof of stake (DPoS) basically works like a digital democracy system where witnesses are voted in by coin holders who are known as stake holders on the DPoS network, these witnesses or witnesses reach consensus in order to added new block to the chain and validate transactions on the network.
Depensing on the delegated proof of stake blockchain network, the might be different rules that govern the network. However, all DPoS mechanisms utilize the same concept. A fixed number of witnesses who are also called witnesses, ranges from 21-101, these witnesses or witnesses who voted in by the coin holders (who stake their coins on the network), are assigned the role of becoming block producers on the network. Block producers add new block and validate transactions and in turn, are rewarded for creating new blocks on the chain.

The voting weight of each stake holder on the network is dependent on the amount of coins they hold. Stake holders cannot only vote for witnesses or block producers, they can also delegate their stake to another stake holder to vote on their behalf. On DPoS, witnesses or block producers take turns and add new blocks every few seconds. In sime delegated proof of stake networks, witnesses are required to have a certain amount of stake on the network, this stake serve as a commitment. The delegated proof of stake (DPoS) consensus mechanism has proven to be energy efficient and offer high performance.