Term of the Moment
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Redirected from: delegated mining
Definition: proof-of-stake algorithm
A blockchain consensus mechanism that determines which miner can add transactions to the blockchain based on the amount of crypto the miner holds. The more crypto and the longer it is held (the more "staked"), the greater the chance of adding the block.
Mining Vs. Minting
When using a proof-of-work method, new coins are said to be "mined." However, in a proof-of-stake algorithm, new coins are "minted." In practice, the mining term is used in both cases.
Delegated Proof-Of-Stake (DPoS)
Delegated PoS is a variation of PoS that is considered to be more democratic. Rather than being the miner that adds the block based on the total amount of crypto at stake, crypto holders use their stake to vote for other miners, which are known as "witnesses," "super representatives" or "validators." The delegates do the mining and are rewarded with newly created crypto plus transaction fees until they are voted out and new delegates are voted in. See proof-of-work algorithm and crypto minting.
From PoW to PoS
Mining Vs. Minting
When using a proof-of-work method, new coins are said to be "mined." However, in a proof-of-stake algorithm, new coins are "minted." In practice, the mining term is used in both cases.
Delegated Proof-Of-Stake (DPoS)
Delegated PoS is a variation of PoS that is considered to be more democratic. Rather than being the miner that adds the block based on the total amount of crypto at stake, crypto holders use their stake to vote for other miners, which are known as "witnesses," "super representatives" or "validators." The delegates do the mining and are rewarded with newly created crypto plus transaction fees until they are voted out and new delegates are voted in. See proof-of-work algorithm and crypto minting.
On September 15, 2022, the Ethereum blockchain switched from proof-of-work to proof-of stake dramatically reducing the electricity required to process transactions (see Ethereum 2.0).