Qredit is built to utilize a consensus mechanism known as Delegated-Proof-of-Stake (DPoS). Since Delegated Proof-of-Stake is not as well known as other consensus mechanisms, like Proof-of-Work (PoW) and Proof-of-Stake (PoS), this article will explain the basics of DpoS.
Proof-of-Work uses specialized hardware to secure and verify the legitimacy of the blockchain. This process is known as mining and as such the nodes on the network are known as “miners”. This system is specifically designed to be difficult and requires considerable computing power to ensure safety of the network. Thies network difficulty is to ensure an arms race, so that no person or group can counterfeit support or easily overwhelm the consensus. By making it increasingly more difficult and expensive to mine, you are making the network more secure. Proof of Work can be seen as not being an infinitely scalable protocol since the hardware and the electricity spent to power that hardware are limited in resources. In Proof-of-Stake, instead of miners with costly equipment racing to mine blocks, a ”validator” can invest in cryptocurrency and use that as a “stake”. That person is, in effect, buying lottery tickets for a chance at block creation. Delegated Proof-of-Stake is similair to PoS, but moves to a delegated model. Those with a stake don’t buy a lottery ticket to be able to create blocks: they use them to vote.
Not only is DPoS a more democratic system, it is also more efficient. Because of the relative few, and high-powered nodes, the selection of block producers allows for the transactions to be validated in a matter of seconds, rather than the 10 minutes it takes the PoW system employed by Bitcoin. In Qredit, it currently only takes 8 seconds to add and validate a block of transactions. Think of Delegated Proof of Stake as a technological democracy. DPoS uses real-time voting combined with a social system of reputation to achieve consensus. Every coin holder can exercise a degree of influence about what happens on the network.
People that are a part of the Qredit community vote for the individuals they want to run the Qredit Blockcahin. The people who get the most votes, get in forging position. Those elected individuals are maintaining the blockchain and securing the network. In this representative based system, the delegates are awarded transaction fees and a block reward of 10 XQR, in order to cover operating costs and secure their vested interest in the productivity and safety of the network. If a delegate stops doing a quality job securing the network, people in the community can remove their votes, essentially firing the bad actor. The strength of a persons vote is determined by how many coins they hold. This means that people who have more coins will influence the network more than people who have very few coins. In Qredit, every address is able to vote for 1 delegate. If someone wants to show support to multiple delegates, the funds of that person needs to be split among multiple wallets, and thereby splitting the voting power. 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 health of the system.
There are multiple reasons why voting is important in DPoS. A vote for a delegate is seen as a vote of support. You as an individual can choose who you trust with the safekeeping of the network, and the direction it takes. A Delegate can bring value to its delegacy in a number of ways. A lot of public pools are sharing a part of their block rewards for instance. But they can also bring other aspects to increase the value of a blockchain project. Think of writing quality content, or maintaining a community. A delegate could also contribute to the Qredit codebase, bringing extra functions or security features. That is why you should carefully select the delegate that is the right choice for you.