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How Does Delegated Proof of Stake Work - A Comprehensive Guide

Nov 01, 2022  |  Bakhtain Afzal

Recent years have shown blockchain's capacity to revolutionize global technical infrastructures and processes. However, the energy efficiency of Proof of Work-based blockchains sparks considerable criticism. PoS blockchains become a realistic solution. 

Since Proof of Stake is already in place, DPoS seems unnecessary. Delegated PoS consensus helps users pay bitcoin for delegates. Once chosen, delegates can make network-wide choices. This article explains delegated proof of stake algorithm and how it works.

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Proof of Stake Consensus Algorithm 

You should first get familiar with the significance of a consensus algorithm in blockchain networks before moving on to learn about the delegated PoS consensus algorithm. The use of consensus algorithms is a prerequisite that must be satisfied before blockchain networks can be considered decentralized. Before a transaction can be included in a block, it must first be validated by each and every node in the network.

The consensus algorithm is the procedure that must be utilized by the blockchain network in order to guarantee that the nodes will reach a unanimous decision on the legitimacy of transactions. Any blockchain that uses delegated proof of stake would use the delegated PoS consensus process to validate transactions. Other blockchain networks operate with their own unique consensus algorithms, just like this one does. Bitcoin, for instance, employs the time-tested Proof of Work consensus technique to validate transactions.

What Is Delegated Proof of Stake

Any debate on delegated proof of stake must begin with its definition. Delegated PoS is comparable to Proof of Stake but works somewhat differently. Delegated PoS offers incentives for voting and delegation. With user collateral, the incentive mechanism secures the network.

Proof of Stake and delegated PoS to need users to stake bitcoin or tokens. Nodes elect witnesses or delegates for block production in delegated PoS. Voters and elected delegates validate transactions in delegated PoS.

Delegated proof of stake consensus elects block producers. Nodes vote by aggregating their tokens in a centralized staking pool and attaching them to a delegate. Delegated PoS allows users to link to a delegate without physically transferring tokens. The chosen delegates must approve and reject transactions.