If you’re confused about these weird acronyms, let me decipher them first: DPoS = Delegated Proof-of-Stake PoS = Proof-of-Stake PoA = Proof-of-Authority In general, I see consensus protocols being divided into : Proof-of-Work (PoW), Proof-of-Stake and Proof-of-Authority. three major groups PoW Proof-of-Work relies on and spending electricity for its consensus to work. Block producers (miners) by calculating hashes and whoever gets a hash (that complies with the certain rules) first, wins. Their block gets to be the next in the . computing power compete blockchain PoW mining machine ( image source ) PoS The second group, , requires block producers to have a (in form of a ) in the system. Basically, whoever has the , holds the biggest chance to produce the next block. There are many different variants possible, for example using the (Aged PoS) or even (Proof-of-Burn). PoS stake native cryptocurrency most coins age of a stake burning coins PoA The third major group is , which relies on as a stake. This means that only can participate in a network as block producers. If they misbehave, the trust in them is broken and they get banned from participating. For this to work efficiently, each block producer’s identity has to be (note that PoW and PoS do not require this). Blockchains that use this approach are called . Proof-of-Authority identity trusted nodes known permissioned Let’s take a at the PoA protocols. There are two main approaches here: centralized and decentralized/distributed. closer look Centralized PoA The centralized approach means that there is a that which can produce transaction blocks. This approach is used by and/or . You cannot let just anyone run the block producing software in this network. You can either close-source it or you can whitelist the nodes allowed to participate (or both). central entity selects nodes closed-source private blockchains Ripple logo on a watch ( ) image source The most well-known cryptocurrency that uses this centralized approach is . The PoA protocol is also used on Kovan and Rinkeby. Ripple Ethereum’s testnets Decentralized PoA The other approach is . This means that the is allowed to which nodes have the to produce transaction blocks. decentralized community choose authority This, of course, involves . And elections are not possible without and their . You cannot vote for something/someone whose identity you do not know (otherwise it’s just a lottery). elections candidates identities Identity does not necessarily mean knowing someone’s name (although this is usually an important feature). It can also involve other candidate’s and , basically anything that persuades a voter that they share the . features actions common set of values ( ) image source Voting Voting can occur in many ways. The most is to say that equals . This, of course, brings up the “Sybil attack” problem, where someone can spin-up thousands of nodes and take over the network. naive approach one node one vote A much better approach is to the vote based on how many coins a node has: a . And this is where the DPoS naming comes from. weight stake misconception All the in the DPoS system on which nodes will become (for example, they need to elect 11 such nodes). The is based on a — nodes with more (native) cryptocurrency have more voting power. Once the 11 block producers are chosen, they create blocks in a order, one by one (there’s no competition among them such as in PoW). nodes vote block producers voting power stake predetermined As you can see, a stake is used only to block producers. But (about the order of transactions) happens on the (distributed) level, with block-producing nodes. elect the real consensus PoA Please note that this article does not assume that some consensus protocol (group) is better than another, especially not between PoS and (distributed) PoA. I think DPoS is a pretty good consensus protocol, although it still needs to be tested on such a scale that PoW has already been. The article is more about semantics than about pros/cons of the different consensus protocols. P.S.: I’d like to thank Luka Perčič and Simon Belak for reading a draft of this article and giving me feedback.

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Why DPoS is not really a PoS, but rather a PoA protocol

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Why DPoS is not really a PoS, but rather a PoA protocol

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Matej Ramuta

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