What is Delegated Proof-of-Stake?

Delegated Proof-of-Stake (DPoS) is used to achieve consensus through a democratic voting system in which the ownership of one coin, counts for one vote. Voting activities include things such as fee schedules, block intervals and transaction sizes. Thus, the more coins you own the more voting power you have.

DPoS is similar to Proof-of-Stake (PoS) in terms of stakeholders having influence relative to their stake in the system. However, what strongly differentiates PoS and DPoS is the democratic component, in which the cryptocurrency community vote for “Witnesses” to secure their computer network.

Each currency determines the maximum number of Witnesses who will be compensated for their efforts. As more people join the network, the competition becomes increasingly challenging as more and more individuals strive to be a Witness. Therefore, Witnesses must adhere to the majority in order to stay in power and those who do not will quickly be replaced.

Thus, the more participants that vote and the more informed they are, the more fair the system becomes.