“Baking” is the act of signing and publishing blocks to the Tezos blockchain. Bakers are a crucial component of the PoS consensus mechanism by ensuring that all transactions in a block are correct, that the order of transactions is agreed upon, and that no double-spending has occurred. Bakers validate all transactions and add them to the blockchain and get rewarded with additional Tezos in that process.

Bitcoin has mining, Tezos has Baking. In Bitcoin, miners compete to publish blocks containing a proof-of-work stamp by repeatedly hashing block headers. In Tezos, block creation is done by bakers. Rather than deriving the right to create a block by finding the solution to a proof-of-work problem, bakers obtain that right when a Tezos token Token (or rather a roll, see below) they own (or that is delegated to them) is randomly selected to create a block.

Tezos is "Baked" using "Proof of Stake" which is much less power intensive, more democratic, and puts the control back in the hands of the actual Tezos owners instead of powerful crypto miners.  To create a new Tez, an owner is called on randomly by the Tezos Blockchain.  The more Tezos you own, the more likely and more often you will get called on.  The "baker" system does do a very small amount of "Proof of Work" crypto calculations to validate the new block but its order of magnitudes less than traditional Proof of Work.

You should have a Delegate who is online 24/7 ready to "bake" Tezos at a moment's notice whenever the system calls or you risk losing your opportunity to grow your Tezos ownership.

Since Tezos Baking requires an account to have at least 8,000 Tezos to make up one role,
many Tezos coin holders will decide to delegate their coins rather than bake themselves.

For most Tezos coin holders, delegation is the best option if you aren’t inclined to run your own server and/or maintain the infrastructure needed to reliably bake on the network. There is a level of technical knowledge and commitment involved. Most users will settle on delegating their coins to a delegation service so that they can earn rewards for participating, but not actually be responsible for any of the technical aspects of baking their own tokens. Delegation is perfectly safe since you cannot lose your coins by delegating, but your earnings can vary depending on the delegation service that you choose.

In Tezos, which is built on a Proof of Stake algorithm called liquid proof of stake (LPOS),
the process of securing the network and processing transactions is called Baking.

Tezos use a delegated proof-of-stake model (DPOS). In Tezos, delegation is the permission given to a Baker to create new blocks using Tezos that other stakeholders have. This is important so that the consensus system happens in Tezos network, allowing everyone to participate. In addition, delegating their Tezos is always the best way to protect against the inflation generated by the protocol, which is currently 5.5% per year.

First, compared to regular delegation, delegation via BaaS would save you the baking fees (10% that we are currently charging). Second, a 50% revenue share on the regular delegation your BaaS delegation enables. A comparison showed that BaaS delegation generates ~44% higher expected earnings than regular delegation (contact us for the details). Essentially, BaaS enables you to earn as much as a public baker would at 8% fees.

Before offering BaaS to a potential contributor, we want to do as much as possible to ensure that him/her understands the risks and rewards. In order to do so, if you are interested in BaaS, please reach out to us by email or Telegram. For the entire article, find the versions in English, Spanish, and Chinese below.

Blockchain is a transparent, secure information storage and transmission technology that operates without a central control body (definition by Blockchain France). By extension, a blockchain is a database that contains the history of all exchanges between its users since its creation. This database is secure and distributed: it is shared by its various users, without intermediaries, which allows everyone to check the validity of the chain.