Homework

• What is the difference between POS and DPOS?
• Advantages and Disadvantages of POS and DPOS?
• Name a few Blockchain projects which uses the DPOS consensus mechanism and indicate the scaling capacity

Good Day Steemians , I will be responding to assignment given by professor @sapwood

INTRODUCTION

In crypto space the need for blockchain cannot be overlooked. Blockchain is a decentralized system which is capable of compiling users transactions information without making use of a middle man rather is it uses peer to peer process.

Blockchain technology is a decentralized system thus thus it doesn't need a third party before verifying any transaction.

Blockchain technology is popular because bitcoin cryptocurrency make use of this technology, blockchain technology is very powerful in dealing with transaction issues.

In centralized system decision making is dependent on the people in authority but in Blockchain their no authority that control the system thus blockchain is decentralized and decision is based on the concensus made by everybody

the centralized system where decisions are made by the leading party, decisions in blockchain are made by the consensus reached by everyone on the blockchain.

Consensus is necessary because it gives the people the right to decide whether valid or void.

Consensus mechanism is the procedure people take in a blockchain to achieve a consensus.

Consensus mechanism is a procedure used in a blockchain to achieve a collective agreement. it gives user the right to contribute in a blockchain. It make sure a collective agreement being met or kept.

Blockchain makes use of different kinds of consensus mechanism and they are as follows;

• Proof-of-work (PoW)
• Proof-of-stake (PoS)
• Delegated proof-of-stake (DPoS)
• Proof-of-capacity (PoC)
• Byzantine Fault Tolerance (BFT)/ Prectical Byzantine fault tolerance (PBFT)
• Proof of burn (PoB)
• Proof of Elapsed time (PoET) proof of authority (PoA)
• Proof of activity, proof of importance (PoI) direct acyclic graphs (DAGs)
• Etc.

The Proof-of-stake (PoS)

Source

In the year 2011 POS was propended as an alternative means to proof-of-work (PoW). PoS and PoW have the same motive for achieving consensus but with different method.

In PoS users stake compare to PoW where miners make use of electricity and hardware .

Miners are not needed in the PoS consensus, there is reduction in energy consumption.

Staking on PoS system is done by users at a period of time, the system selects the node randomly to validates the next block. Selection of the next block is determined staking age, amount of stakes and randomization.

Factors that determine selection in PoS as validator

• Duration or Age of coin: nodes are selected based on the duration of stake. eg. The longer the duration of stake the higher the chance of being selected.

• Amount or Quantity of stake: When the stake is high the greater chance of being selected.

• Randomization: validators are being picked randomly base on the highest stake etc.

• In Pos Miners are rewarded with cash gotten from transaction fee reverse is the case in PoW miners are paid with new token.

Benefit of PoS

• Pos is affordable to use compare to PoW where miners invest so much in setting up computer hardware that consumes energy.

• PoS is highly secure which prevent fraudulent activities.

• PoS ensures their is fairness in picking validators and rewarding them

Delegated Proof-of-stake ( DPoS)

Source

Delegated proof-of-stake was built based democracy which was achieved stop centralization and fraudulent in the blockchain system.

DPoS was developed in the year 2014 by Daniel Larimer, and American software developer also the founder of EOSIO software and Bitshares and steemit.

DPoS was design to replace f both PoW and PoS because it is more scalable than local algorithm.

DPoS was built to phase out the use high energy and time consuming machines .

The first DPoS thatwas created in blockchain is Bitshares.

How DPoS works

DPoS is a modified PoS consensus that depends on a group of delegate to validate blocks on behalf of all nodes in network system, it works using witness. The witness is being selected by stakeholders on base of one vote per share per witness.

The witnesses are ones that create or add new block in a blockchain. For example on steemit, there are 21 witnesses controlling the affairs of the blockchain. The witnesses are controller of transactions validation.

Administrators in the blockchain system are called delegates. The users in the blockchain choose them to pilot the affairs of the blockchain and make important changes.

The duty of delegates in a blockchain :

• They determine the transaction fee in a blockchain system.
• They determine the size block in a blockchain.
• They determine the block interval of blockchain.
• They also determine the witness pay.

DPoS is the most democratic system in a blockchain consensus that gives everyone in the blockchain the equal right to be selected as a witness.

Advantages

• It contributes in carrying everybody along thus nobody is left behind.
• It is not centralized but rather decentralized and it practice democracy.
• It is users friendly and large amount of energy.
• Base on the democratic nature, it gives the users the opportunity to select their witness suited for them.
• Less transaction fees.
• Because of the fear of loosing ones position, The witnesses are always honest.

Disadvantages

• There is lesser number of witnesses. For example, we have just 27 super reps in tron blockchain and 21 witnesses on steemit blockchain.
• The presence of delegates, witnesses and reps makes it look like a centralized system thus criminals are granted the right to control the network.
• There is possibility of low vote turnout.

Differnces between PoS and DPoS

PoS	DPoS
1. Block builder are selected progressively	Block builders are chosen by the users.
2. Less flexible	more flexible.
3. Miners are paid with the funds from transaction fee	Genuine members are paid with staking rewards.
4. Selection is dependent on those who has high stakes	Every user have equal right to be elected as validator or a delegate
5. Suitable for financial uses	Suitable for social uses .
6. It make use of transaction fee	It doesn't make use of transaction fee.
7. Consensus is reached randomly	Consensus is reached based on the delegates trust.

Name a few blockchain projects which use DPoS consensus mechanism and indicate the scaling capacity

Scalability of a blockchain is an element of the blockchain like block to expand its capacity so it can process more transactions at very short interval. It can be defined as the increase in the transaction speed example the amount of transaction processed at a given period of time.

Below are example blockchain that uses the DPoS consensus mechanism with their scaling capacities.

Steem

It is a cryptocurrency designed for social and content base network example steemit. Steem is one of the rewards authors receive on steemit platform . It's scaling capacity is actually graded higher than ethereum and bitcoin network. The data above shows that steem is actually better than bitcoin and ethereum networks.

Source

EOS

EOS blockchain was designed for public and private users, It does not make use of on-chain transaction fees.
Daniel Larimer, the developer of steemit as well as EOS , it's scalability rate is 10,000 transactions per second (TPS).

Source

Bitshares

It is a cryptocurency that is use for stack of financial services example exchange and banking in a blockchain. Bitshares scalability rate is 100,000.

Source

Tron

Tron was designed by a Chinese software developer called Justin Sun. Tron is incorporated in steemit blockchain system after a resolution was reached on December 2020 that is the sole reason why steemians are rewarded with Tron for using steemit platform. Tron scalability rate is over 1,000 transactions per sec.

Source

Telos

Telos is the second most used blockchain cryptocurrency with the scalability rate of 10, 000 TPS and 0.5 seconds block time.

Source

Nano

Nano was designed by Colin LeMaheiu in 2015 as the most fastest blockchain in the world with no transaction cost. The network can process over 1, 000 transactions per second.

Source

Worbli

Worbli is a cryptocurrency blockchain designed to fasten business and individuals transaction. It's scalability rate is 4, 000 TPS.

Source

Conclusion

Consensus mechanism ensures that agreement, trust and security is being met in blockchain networks. it promotes unity and other affairs of blockchains.

DPoS can also be seen as PoS even though is completely decentralized and it takes a different approach.

In blockchains system that uses DPoS, scalability is better than those that does not operate on it.

Thanks' professor @sapwood for this great lecture.