What is Delegated Proof of Stake?

What is Delegated Proof of Stake?

By CryptoSpyder | AltCoinCave | 7 Sep 2020


Proof of stake is a term that is well known for most crypto enthusiasts, but it's far from widely understood. With all the questions around Etherium gas prices and transactions, it's important to understand what delegated proof of stake really means. In order for any commerce or transaction to take place, all parties must agree, or be in consensus. 

Consensus or the simple act of agreement is the basis of all transactions, and thus vital to crypto currency. Delegated proof of stake is a methodology of validation that is efficient and effective, without the headaches. It makes crypto currency lightweight, simple and easy to use for the common person. Let's take a look at how Proof of Stake accomplishes this task. 

What is Delegated Proof of Stake

In our example, Party A cannot conduct business with Party B, if both sides don't agree on what is being sold or how much is being paid. This simple act of agreement is vital to the real-world application of cryptocurrencies, and delegated Proof of Stake is the future of all digital transactions. 

Delegated Proof of Stake vs Proof of Work

Proof of Stake exists and functions quite well today, powering several alt coins and validating all transactional data. Delegated Proof of Stake works collaboratively to validate faster than traditional coins such as Bitcoin. Bitcoin or Proof of Work coins, validation occurs when miners take these complex math equations to calculate, validate and pass the information on. 

This data is crunched and passed along to the network, and the miner collects their fee and races to the next block to be calculated. While this methodology is effective and profitable in small environments, it can quickly become bloated and painfully slow. As the number of transactions increases, these mathematical problems become more expensive and inefficient. 

Proof of Stake (PoS) can be thousands of times faster and cheaper than it's Proof of Work (PoW) counterparts.  

In the delegated proof of stake model, computational power is not the common denominator. Instead, the networks vote for the most qualified node to run the network, and provides the consensus for all computations moving forward. This provides a faster energy-efficient way to validate transactions, as there are dedicated block producers that take turns in validating transactions. Not only that but the democratic method in which Proof of Stake works ensures that everyone has a fair shake, and that the currency in question stays decentralized. 

To make things simple, the Proof of Work method rewards the computer or miner for solving complex equations. In Proof of Stake, the individual that creates the next block is based on how much they have 'staked'. The computers that work within a proof of stake environment have real liquidity to stand on, and are randomly chosen to help validate transactions.

Some of the main crypto coins are Proof of Work models, which has long been the standard. Coins like Bitcoin and Ethereum are based on Proof of Work, but it's only a matter of time before the electricity, cost and centralization will lead to Proof of Stake forging the future of cryptocurrency and beyond.

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CryptoSpyder
CryptoSpyder

Tech enthusiast and crypto lover. Follow me at altcoincave.com or my.prostreetonline.com


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