Description

1. Leah Stella Stephens:

"I like to think of Delegated Proof of Stake as technological democracy. Just think about how many asshole bosses there are out in the world. Have you ever wanted a system in which you, the employee, get to fire your own incompetent boss? Well, there is a new system that is very close to the reality of employees getting to fire their own managers. It’s called Delegated Proof of Stake.

...

A blockchain engineer named Daniel Larimer realized that Bitcoin mining was too wasteful of energy. He also recognized that Bitcoin mining would become centralized in the future, with giant mining pools being in control of the Bitcoin network. Additionally, he wanted to build a system that was capable of transaction speeds like 100,000 per second. Bitcoin’s system was too slow due to the way it was designed and the system it used: Proof of Work. He decided to invent and build a new system that used very little energy, was lightning fast and also very secure. Dan named this new system, Delegated Proof of Stake, or DPOS." (https://hackernoon.com/explain-delegated-proof-of-stake-like-im-5-888b2a74897d)

2. Gleb Kostarev:

"A similar but different approach is taken by BitShares and a number of other platforms. With DPoS, coin holders use their balances to elect a list of nodes that will have the opportunity to stake blocks of new transactions and add them to the blockchain. This engages all coin holders, though may not reward them directly in the same way as LPoS does. Holders can also vote on changes to network parameters, giving them greater influence and ownership over the network." (https://blog.wavesplatform.com/review-of-blockchain-consensus-mechanisms-f575afae38f2)

Characteristics

(examples from steem.it)

"What are the ingredients for DPOS? A cryptocurrency, a blockchain, community of people, computers and rules.

People in a particular cryptocurrency community vote for Witnesses to secure their computer network.

Only the top 100 Witnesses are paid for their service. The top 20 earn a regular salary. Because many want to become a Witness, there are hundreds of backup Witnesses.

People’s vote strength is determined by how many tokens they hold. This means that people who have more tokens will influence the network more than people who have very few tokens.

As the community grows, it gets harder and harder to remain a paid Witness due to increased competition.

If a Witness starts acting like an asshole, or stops doing a quality job securing the network, people in the community can remove their votes, essentially firing the bad actor. Voting is always ongoing.

This system works because it is able to flush out bad actors and at the same time recognize new valuable members. The system is dependent upon active voters in the community, so educating new members about how the system works is essential to the well-being of the system." (https://hackernoon.com/explain-delegated-proof-of-stake-like-im-5-888b2a74897d)

Examples

Current cryptocurrency projects that use Delegated Proof of Stake:

BitShares: https://bitshares.org/

Steem: https://steem.io/

EOS: https://eos.io/

Lisk: https://lisk.io/

Ark: https://ark.io/

Discussion

The oligarchic effects of DPOS

Aaron Sun Camacho:

"I've been watching the politics of DPOS for at least 3 years as a member of Steemit and then Hive and you are pointing out what many consider the primary problem. Stake is based on "staking" tokens and tokens can be bought or earned by posting content and cursing content.

The payouts depend on the weight of the combined stake of all the upvotes received.

Due to this, people who already have the ability to buy more tokens can easily earth more tokens. This creates a spiral of wealth creating more wealth.

Also, if the value of each token goes up over time then the early adopters are able to afford more tokens than the newcomers. That leads to more power to the "elders". Then there is the big issue of how the tokens are initially distributed. With Steemit the initial majority of tokens were created by and for Steemit which plagued that system. Hive was a fork from that which took those tokens and moved them to a DAO setup for community controlled distribution.

What has been amazing is to see the manifestation of Representative Democracy come into existence that mirrored the money = speech = power dynamic in the US. Then there was vote buying, vote leasing, vote trading, etc.

If the Tokens were impossible to sell/buy and only earned through participation in content creation and curation then the system may have become more of a meritocracy. The problem of those with power having the ability to gain more power easier than those without is a hard problem to solve. Prohibitions on buying and selling votes lead to circumvention and profitable black markets.

I do think their system is superior to the current nondigital governments since every stakeholder's stake is public and every vote is public, so although there may be oligarchy, it is transparent and therefore easier to see and attempt to address.

There's plenty more, but that all I can think of for now.

Googling "the problems with Steemit" (or DPOS) will probably bring you will written posts on the matter." ([1])

More information

explanatory video: https://youtu.be/hAxDjAmRKkU

The inventor of DPOS, Dan Larimer

https://www.coindesk.com/people/dan-larimer

Delegated Proof of Stake

Contents