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Delegated Proof-of-Stake (dPOS)

By CoinGecko | Updated on Mar 03, 2020
A consensus mechanism where selected members of a network are voted as delegates to validate transactions and produce blocks on a blockchain. Members of the network vote for delegates through their holdings. Usually the highest voted delegates have the most power and tend to produce the most blocks and therefore rewards. Some protocols have built in mechanisms to balance it out. Overall, the delegated proof-of-stake system was built to counter the energy use and efficiency issues of the proof-of-work blockchain, at the cost of some degree of centralization.

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Related Terms

Custody
Protective care or guardianship of an asset.
Distributed Ledger
Ledgers whose data is stored and synced across a network of nodes.
Arbitrage
A strategy where investors buy a currency in a market and sell it at a higher price in another market to gain profit.
Node
Within the blockchain network, the nodes are computers that connect to the network and have an updated copy of the blockchain
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