Difference between PoS & DPoS | Steemit Crypto Academy Season 4 - Homework Post for Task 3
| Proof of Stake | Delegated Proof of Stake |
|---|---|
Proof of stake we can see these are both consensus algorithms helping to democratize the function of a blockchain. So, proof of stake you have your tokens, you can stake them and with that, you'll get voting power and things of that sort and you'll also get rewards. | When you take your tokens and you delegate them to a representative then that representative can kind of vote for you and you also get rewards through the representative. |
Proof of stake you are staking by yourself | Delegated proof of stake, you're delegating your tokens towards someone else so they can vote for you. |
Proof of stake is considered more decentralized just because it's the person and their power | Delegated proof of stake is considered less decentralized because you're kind of delegating your power to someone else. |
The validation process is not very fast. | Delegated proof of stake allows for block producers to validate transactions in seconds providing faster transactions. |
The validator will have to be the one to validate the transaction. | Powers are been delegated to representatives to validate transactions of their behave. |
- Energy efficiency:
- Decentralization:
Especially for public blockchains, decentralization is an essential feature. Here, we pay attention majorly to the concentration of miners or block producers. Everybody who holds this token can be part of the validation.
- Scaleability:
It allows other scaling methods like working without reducing the security.
- Complexity:
- Centralization:
And since the validator doesn't have high electricity and also the hardware costs are very low, the validator doesn't need to spend those tokens he earns. As a result, the block validator would gather those tokens over and over and increase its wealth. This would bring about an increasing influence on the validator in the staking pool, which can be kept on forever. It would also prevent the distribution of the newly created token by the validator among other users.
- Initial distribution:
- Energy Efficiency-
- Speed -
- Enhanced democracy -
- Mandatory participation -
- Rich get richer -
DPoS users that stake huge amounts of cryptocurrency will have more voting power and therefore the user will have a higher influence in deciding delegates. Their voting power will only continue to rise as they receive a large return than users who have smaller stakes.
- Formation of cartels -
The witnesses can reduce the role of validation amongst small stakeholders while creating their own group and reaping higher rewards. This makes the blockchain less tough to attack and makes it less decentralized.
Steemit is also a good example of a DPoS consensus mechanism that processes 10,000 transactions per second.
Also, EOS is not let out, EOS can process about 4000 transactions per second and this is carried within an average confirmation time of 0.5 seconds.