Consensus Algorithms (Delegated Proof of Stake (DPOS) (How does it work?…
Delegated Proof of Stake (DPOS)
Uses less electricity than PoW
A technical democracy e.g. 'fire your own boss'
What is required?
A community with rules
The system is dependent upon active voters in the community, so educating new members about how the system works is essential to the well-being of the system
How does it work? By a reputation system!
Vote strength is determined by the number of tokens people (within the network) hold. So the more tokens you hold, the more you influence the network
As the community grows, it becomes harder to remain a paid delegate (or witness) due to competition
Only a few members of the community are voted as delegates (or witnesses) to transactions
If you do a bad job as a delegate or witness, the community can vote to replace you. You need to provide value to the community
Voting is always ongoing
The delegates (or witnesses) have the ability to prohibit un-trusted parties from taking part in the network
Proof of Work
Distributed consensus in a trustless environment
Nodes are computers on the network
Nodes agree on the truest blockchain i.e. the one that is the longest
Bitcoin uses the Hashcash proof of work system
Based on SHA-256
Each node verifies the work done by another node
Costly and time-consuming to produce but easy for others to verify
Proof of Stake
Proof of Importance