What is Delegated Proof Of Stake, and What Does Staking Have to Do With It?

Is Delegated Proof Of Stake is The Proper Solution to Main Crypto Industry Problems or Just a New Cute Idea to Squander Money?Image by xresch from PixabayWhat is the difference between PoS and DPoS?Delegated Proof of Stake (or DPoS) is a consensus algorithm created by developer Daniel Larimer in 2014. A list of notable projects using DPoS:BitSharesSteemitLiskArkEOSPoS is like direct democracy, while DPoS is like a representative. Classic PoS allows coin holders to “stake.” The coin holder confirms transactions and receives new coins as a reward.Rewards in the PoS network depend on the number of coins owned by the holder (“staker”). The larger the stake, the greater the reward.PoS encourages holders of large sums to stake and creates an inequality similar to the distribution of mining capacity in the bitcoin network: a miner who has invested more in equipment has a greater chance of finding a block.Delegated Proof of Stake makes the distribution of coins and influence on the network more even and provides a greater degree of decentralization.In DPoS blockchains, each wallet with coins on the balance can vote for the so-called “delegates” (Delegates, Block Producers, Validators) — special community representatives who have the right to generate a block and receive a reward in the form of transaction fees.DPoS is resistant to attack by a corrupt minority. If delegates harm the network or go offline, network members re-elect and appoint new delegates until the number of honest block producers returns to 100%.What are the functions of delegates in DPoS blockchains?The delegates’ authority is to set up the basic rules of the network, maintain the stable operation of the blockchain, and generate blocks. They receive transaction fees as profit. Any member of the network can become a delegate, but only for a short time.The network pays the delegate to generate…