Delegated Proof-of-Stake (dPOS)
By CoinGecko | Updated on Mar 03, 2020
A consensus mechanism where selected members of a network are voted as delegates to validate transactions and produce blocks on a blockchain.
Members of the network vote for delegates through their holdings. Usually the highest voted delegates have the most power and tend to produce the most blocks and therefore rewards. Some protocols have built in mechanisms to balance it out.
Overall, the delegated proof-of-stake system was built to counter the energy use and efficiency issues of the proof-of-work blockchain, at the cost of some degree of centralization.
Related Terms
Off-chain
It refers to transactions occuring outside the blockchain and executed instantly.
Proof-of-Authority (PoA)
A consensus algorithm that asigns block validation queue based on identity and reputation.
Hash
A hash function is an output code (unique and alphanumeric) that we obtain from an input string,
Bakkt
Bakkt is a company developed by the Intercontinental Exchange (ICE), owner of the New York Stock Exchange. It specializes in Futures/Options contracts for cryptocurrencies.
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