What Is Delegated Proof Of Stake?

What Is Delegated Proof of Stake?

Delegated Proof of Stake (DPOS) is an alternative consensus mechanism to the more commonly used Proof-of-Work (PoW) scheme or the Proof-of-Stake (PoS) scheme. In DPOS, to start a new block and create a new transaction, you must present the entire blockchain history until now.

This ensures that such transactions are valid and happen. The Delegated Proof of Stake, also known as DPoS, is a consensus mechanism for blockchains developed to solve the shortcomings of other consensus protocols, such as Proof of Stake and Proof of Work.

The DPoS protocol, which uses collateral staking as its mode of operation, is thought to be a more democratic, cost-effective, and efficient method for validating transactions inside a blockchain network.

Users cast their votes to assign block validation powers to delegates or witnesses with a high authority level under the DPoS mechanism.

The solution represents a development of the more conventional PoS, although bitcoin projects only frequently use it at this time. The reason is that the PoS consensus model is unsuitable for large-scale, high-performance transactions.

In addition, Delegated Proof of Stake (DPoS) is a more advanced form of PoS which allows voting in a manner where the owners of tokens do not have to take any action to vote. Mainstream DPoS blockchains are Byteball and Stratis, and there are also other projects in the works, like IOTA, Lisk, and EOS.

How does Delegated Proof of Stake work?

How does Delegated Proof of Stake work

As stated above, the DPos protocol uses a model of collateral staking for validating transactions. Delegated Proof of Stake is a cryptocurrency protocol developed in 2014 by Daniel Larimer. It is based on a voting system in which users stake tokens to vote for delegates or witnesses.

The formation of blocks and their verification, in addition to the protection of the network, are the responsibilities of the elected delegates.

The precise number of delegates needed to create a block will differ from one project to the next, but in most instances, between 20 and 100 delegates are chosen for each new block created.

A reward is given to the delegate once the block has been constructed and the data has been confirmed. This payment is then distributed among the delegate’s voters.

When it comes to the voting system, like with PoS, a user’s voting power increases in proportion to the number of tokens they have staked in the system. It is essential to remember that voters retain authority over the system.

This implies that users can vote delegates out of office if they engage in dishonest or inefficient practices or attempt to damage the network. In most cases, delegates who have a solid reputation have a better chance of being elected as witnesses. This is because such individuals are more likely to sincerely look out for the network’s and the community’s best interests.

Coins that use the DPoS consensus protocol often have a special layer for witness/delegate voting called master nodes. Delegates are also called witnesses.

In a PoS system, the number of coins available within the network is used as votes. With a DPoS system, primary node owners vote on delegates or witnesses they want to represent in the consensus process.

How does DPoS consensus work?

How does DPoS consensus work?


In the DPoS consensus, users can vote directly or give their voting power to another entity so that it can vote on their behalf. Selected witnesses are tasked with validating transactions before blocks may be created.

They are eligible for a reward, typically split with those who voted for them to be a witness if they verify and sign all of the transactions contained in a block.

Suppose a witness can complete the verification of all transactions within the allotted time. In that case, the block will be noticed, all transactions will be left unverified, and the witness will receive a reward.

The reward is added to the reward of the subsequent witness that verifies that block. The subsequent witness compiles these transactions, and a block that contains such transactions is referred to as stolen.


Witnesses verify transactions that are bundled into a block. They also certify the suitability of each witness to serve as a delegate. Witnesses typically receive revenue from the block reward and transaction fees (if any) attached to their block.

All delegates, including witnesses, must first be selected by users who vote on a set of available delegates or witnesses, who are then chosen in a drawing by random selection. Delegates are elected using coin age as the main criterion, but they also need sufficient capability and network support to be elected.


Delegates are the only nodes that can create blocks. These individuals play the role of miners on the network. Still, they are not required to solve any difficult mathematical problems while they go about the process of creating new blocks.

Block validators:

Block validators are responsible for verifying the transactions in each block and signing off on a block. They process unconfirmed transactions and transmit them to the network.

The full details of each transaction are stored permanently on the blockchain. All computers part of the network must agree on which blocks are legitimate and which blocks will be rejected.

Why Blockchain Needs Consensus Mechanisms?

The blockchain is a very large and secure ledger that keeps track of all transactions in the network to date. It is a digital public record that is shared among the network members. The lack of central authority in the blockchain makes it possible for them to run a P2P system because members do not need to trust anyone else.

But, as seen in the case of bitcoin during its earlier versions, even with a secure network, it is impossible to guarantee that all the nodes on the network will be honest.

To make sure that the blockchain remains honest and runs smoothly, some mechanism needs to be implemented to help ensure that all nodes on the network are acting honestly.

This is where the consensus mechanism comes into place because it helps maintain an accurate record of all transactions and stops any alteration or tampering.

To fully appreciate how good stake-delegated evidence might be, one must first be familiar with the rationale behind why blockchain technology necessitates the use of consensus.

A blockchain is a decentralized digital ledger that may record all of the transactions that take place across a network. Blockchains are typically used in cryptocurrency transactions.

It has become clear that decentralization is an indispensable component of any blockchain technology. This indicates that a single entity is only responsible for monitoring some transactions. Instead, these transactions are spread out over a network’s many nodes in a decentralized fashion.

It is still possible to validate transactions using cryptographic hash functions, despite transactions being dispersed across many nodes. These functions generate unique values for different unique inputs.

It is generally accepted that the record that contains the greatest number of nodes is more reliable than the others. Blockchain technology must have consensus procedures to perform its intended functions correctly. Because these standards are in place, the many nodes that make up the network can accurately validate lawful transactions.

In the case of Bitcoin, the proof of work (PoW) consensus mechanism is used. While it is known for producing impressive results, the PoW consensus protocol requires a significant investment of time and energy.

Consequently, the transaction speed could be faster than the normal networking protocols utilized by businesses such as Visa and MasterCard.

It is essential to have these protocols in place to ensure that all of the nodes that make up a server can reach a consensus over each transaction. This is true regardless of the protocols that the various cryptocurrencies utilize.

Because there is a process for reaching a consensus, the nodes can decide whether or not a transaction should be accepted. This mechanism also protects users from double spending, when one coin is used to complete two separate transactions.

Benefits of DPoS

Benefits of DPoS


Blockchains can have scalability issues due to the amount of space that needs to be stored because the blockchain is distributed. The desire for scalability may lead to two rival cryptocurrencies co-existing on a single network.

If there are two cryptocurrencies with their blockchains, then each cryptocurrency will become more expensive to send over the network due to slow digital transfers. For one currency to become more dominant than the other, it will require an in-depth technical analysis and a lot of people’s support.


To use the blockchain, miners must solve complex mathematical problems. This can lead to the miners requiring a lot of processing power and money to mine.

Many people have mining operations in their homes or workplaces for this reason and entertainment purposes. The amount of money required to mine is a disadvantage because it may need to be more cost-effective for less powerful miners.


The blockchain has shown that it can be used in many ways and has a great future. Many industries are thinking of using the blockchain to improve their business.

Blockchain could be the solution to many problems that these industries face. Some of these industries include real estate, banking, and even insurance. These industries may utilize the blockchain’s distributed ledger technology to manage their sites or use it as a distributed database for customers.

Reward distribution:

Blockchain mining is a very difficult task. To mine a block, miners have to solve complex math problems. However, they receive rewards in cryptocurrencies for every completed block.

Thus, mining tasks become unprofitable if the rewards are too low. As a result, blockchains find it difficult to stay competitive because of this problem, which is why there are constant technical issues with blockchain technology.

Democratic approach:

The consensus mechanism of DPoS differs from PoW in that most of what dictates the process comes from the users. DPoS is based on a 20% stakeholder model, slightly different than the 50% stakeholder model of PoW.

While PoW focuses on one entity responsible for approving a block and maintaining that power over other miners, DPoS allows various stakeholders to vote on decisions and forks.


DPoS in blockchain technology makes it easier for many stakeholders to agree to and approve tasks or changes in the network. That is why DPoS is considered the perfect fit for decentralized networks. It also helps maintain a consistent record over time, which can be important for providing evidence in a court of law.

The blockchain’s main goal is to make transactions safe, secure, and fast. Though blockchain technology is promising, we must remember that it is still in its very early stages of development.

The recent Bitcoin hard fork and the BitConnect hard fork prove this fact. Nevertheless, with time, blockchain technology will mature and better understand to adapt to new needs.

Therefore, while blockchain technology has so much to offer, it is extremely important that we keep it in check and do not let our emotions take over.

Read Also –

What is Bitcoin? A Complete Guide for Cryptocurrency Beginners

How Does Bitcoin Work? A Deep Dive into Technical Aspects of BTC

Consensus Mechanisms In Blockchain: A Beginner’s Guide

What Is Cronos?

7 Common Crypto Scams and How To Avoid Them