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The Delegated Proof of Stake (DPOS) Explained


Public blockchains are often faced with scalability problems. To confront these issues, some blockchains (such as EOS, Steem, Lisk, and Ark) have selected to use a consensus mechanism called the Delegated Proof of Stake (DPoS). The DPoS seeks to increase the speed of transactions and block creation, while not compromising the decentralized incentive structure at the heart of the blockchain.

The Delegated Proof of Stake (DPoS)

The Delegated Proof of Stake process is termed as a very reliable and robust and the most efficient consensus algorithm within the Blockchain networks often described as a technological democracy. It is very important to note that the Proof of Stake algorithm is different from the Delegated Proof of Stake as they work in different ways.

Delegated Proof of Stake (DPoS) was the creative invention of the Bytemaster Daniel Larimer who is the lead developer at Bitshare. He aimed to give the stakeholders of any coin the power to have a vote on the consensus resolution process democratically.

Technology is increasingly becoming an integral part of the place of work for many people. In large offices or even the smallest of businesses, technology is being incorporated to assist in fast business operations and convenience. These operations can be carried out from any part of the world, provided a network exists. This also requires traces and records of the activities to be stored digitally as it is the most convenient and fastest form of keeping business records.

However, these records are vulnerable to tampering if left to the mercies of just a few individuals. Malicious people or software can access any network. This has resulted in the need for a computer science process called consensus algorithm which is used to achieve an agreement for a single data value among different individuals in a particular network.

What is a Consensus Algorithm?

The consensus algorithm, as noted above, is a process that aims at solving a consensus problem in any distributed network. In any distributed network, a source process creates multiple nodes in which in many instances they are unreliable. Consensus algorithm steps in to ensure that an agreement has been reached on these nodes to build reliability in any particular networks.

The Blockchain network has made use of the consensus algorithm to maintain its decentralized feature and to provide security and reliability in its transactions.  This process enables investors in any Blockchain to monitor and follow on the transactions being carried out without there being any double spending of the cryptocurrencies involved. It also creates a form of a firewall to discourage ill-intentioned individuals from tampering or replicating these coins.

The Blockchain technology world has introduced many forms of consensus algorithms with each serving its desired purpose. Such consensus algorithms that are used to secure these networks include:

All these forms of consensus algorithm play a similar role in the Blockchain technology; however, they each have unique features that each Blockchain considers superior to the other. We are going to take a look at the robust Delegated Proof of Stake.

How It Works

The Delegated Proof of Stake works in a way that the shareholders are the main players in any particular Blockchain network. The shareholders are responsible for voting for witnesses who are then tasked with transaction verifications and producing blocks. These witnesses receive payments from the transaction fees which are determined by elected delegates.

The shareholders can vote for these witnesses at a rate of one vote per share thus the shareholders with most coins get more votes. However, a witness has to get the highest number of votes from various shareholders, and only the top twenty witnesses are eligible to carry out the stated functions. This factor in itself creates efficiency as it exerts pressure on the witnesses to perform excellently in their work as they can be replaced at any instance they misbehave or act fraudulently.

The delegates, in this case, are also voted by the shareholders, and they are tasked with making amendments and proposed changed in the network where the shareholders then review these proposals and make the final and ultimate decisions. These delegates are however not rewarded for their services but aid in streamlining the operations in the particular Blockchain network in which developers use their findings and recommendations to tune the network.

The Delegated Proof of Stake system is critical to ensure that the selected witnesses do not fail to confirm their transactions as it actively detects any failed communication in the network. This prevents the double spending of a transaction in the system and creates security in its 100,000 transactions/ second goal.


The Delegated Proof of Stake network has proven to be a superior system as it is the most decentralized network there is. This is because although shareholders have the ultimate power, no single entity can control the system as the work trickles down to the elected delegates and the witnesses. Work also continues even when a single or more witnesses fail to operate as more witnesses can be elected to that position ensuring continuous participation in the block creation process. Thus, this makes DPoS the most secure, reliable and cost-efficient mining tool.

This system is currently being used in Blockchain networks such as Bitshare, which has been in operation for more than three years, and Steem, running for more than one year now, which have provided proof that DPoS superiority in the number of transactions run and its decentralized feature.

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