If you’re interested in crypto, you’ve most likely heard of DPoS and PoS before – but maybe you’re not totally sure what they are. Fair enough – all of those technical crypto terms can feel overwhelming and a little confusing. Luckily, we’re here to help. In the case of DPoS vs PoS: winner takes all, is there even a clear victor? Let’s explore.
One thing to note is that whenever a new protocol goes into place and a popular system is introduced, exchanges need to incorporate that blockchain into their systems to facilitate the trading. For instance, when EOS was launched, platforms like eToro had to incorporate the new crypto’s blockchain into their systems.
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What is DPoS and PoS?
So what is DPoS and PoS? DPoS stands for Delegated Proof of Stake, while PoS stands for Proof of Stake. Both are consensus algorithms, helping to democratise the functioning of a blockchain.
As a concept, the Proof of Stake system asserts that a person can mine or validate block transactions based on how many coins they hold. So, the more altcoins a miner owns, the more benefits they can reap. Proof of Stake (PoS), was created as an alternative to PoW (Proof of Work), which was the first consensus algorithm used in blockchain. Contrastingly, PoW takes up huge amounts of energy and miners eventually had to sell their coins simply to pay their electricity bills. It’s also not the most environmentally friendly option – for obvious reasons. Proof of Stake is also considered to be a safer option than PoW, as it discourages miners from attacking the network.
Delegated Proof of Stake (DPoS) is a consensus algorithm that works to maintain irrefutable agreements across a blockchain, validate transactions, and acts as a digital democratic system. Delegated Proof of Stake combines real-time voting with a system based off of reputation to reach consensus across the blockchain. Each and every token holder has a say in what happens on the blockchain. However, the token holder’s voting power is still determined by how many tokens they have.
Delegates are voted in by token holders. Their role is to ensure their node is always running smoothly, to validate transactions, and to work in the network’s best interest at all times. A DPoS system ensures the network is self-governed by all of its participants.
Advantages of the Proof of Stake system
In order to truly determine who comes out on top in DPoS vs PoS: winner takes all, we first need to examine some of the advantages and disadvantages of each system. So, what are some of the advantages of the Proof of Stake System?
Advantages of the Delegated Proof of Stake system
Some advantages of the Delegated Proof of Stake system:
Disadvantages of the Proof of Stake system
Some disadvantages of the Proof of Stake system are:
Disadvantages of the Delegated Proof of Stake system
So, what are some of the disadvantages of the Delegated Proof of Stake system?
DPos vs PoS: Which turns up tops?
We know cryptocurrency terms can feel a little confusing so we hope that this guide has helped you understand these concepts a little bit more.
In the case of DPoS vs PoS: winner takes all, one thing has become abundantly clear – both protocols have their own merits and both have their downfalls. It’s incredibly difficult to say which one is actually better because both systems have the opportunity to work incredibly well or to fail miserably – it all depends on the people who vote in and run the systems.
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Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.