It’s primarily based on a consensus mechanism referred to as delegated proof-of-stake (DPoS).
On a PoW blockchain like bitcoin, miners make use of giant quantities of computational energy to unravel complicated mathematical equations. As soon as the equation is solved, the miner publishes the reply for verification by the opposite miners on the community, and consensus is reached. The block is then added to the chain, the miner that solved the equation collects his/her block reward, and everybody strikes on to the subsequent equation.
On a PoS community like Cardano, nodes stake an quantity of tokens (basically locking up tokens in a particular pockets deal with for a set time period) for the possibility of being chosen so as to add the subsequent block of transactions to the chain. Though the choice is random, components resembling the quantity staked, the period of time it has been staked and the repute of the node are sometimes considered.
Delegated proof-of-stake is a model of PoS, the place as a substitute of validators being chosen at random, they’re voted for by the remainder of the token holders on the community. One other distinction on EOS particularly is that, as a substitute of purely staking EOS tokens, Block Producers stake their funding within the community within the type of infrastructure, neighborhood help, growth, and many others. We’ll have a look at this extra in-depth under.
These delegates are then tasked with upholding the integrity and accuracy of the community by coming to a majority consensus on information or transaction blocks that should be added to the community.
Brendan Blumer, CEO of Block.one, the corporate behind EOS, describes Block Producers within the EOS.IO expertise as “21 elected delegates by the token holders which are truly confirming the transactions of the community.”