Blockchain 101 Episode 57 – What is Delegated Proof of Stake?

Delegated Proof of Stake, Known as (DPOS), is similar to voting for board of directors. Token holders vote for a fixed number of nodes which represent them in verifying and updating the ledger.

To encourage greater participation in these elections, the network generates a small amount of tokens as rewards. Bitshares, PPCoin and other cryptocurrencies utilize this consensus model.

DPOS is rather similar to a parliament system If delegates fail to carry out the responsibilities given to them, such as, failing to update the ledger during their turn, they could be removed and the network would elect new delegates as replacement.

In DPOS, every single client can decide which node to trust. Compared to POW, DPoS has greatly increased Blockchain’s data processing capability, allowing transactions to be completed within seconds and minimizing the cost of network security maintenance, allowing cryptocurrency transaction speeds to be similar to centralized settlement systems such as Visa.

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