Your FAQ page can act as the first point of contact for customers looking for answers before they reach out to elite-chain directly with their questions.
What is PoS and how does it work?
Proof of Stake is a consensus algorithm that allows new transactions in a chain network to be verified quickly and confidently. As with any other algorithm, the verification work must be completely decentralized in order to limit the possibility of repeatedly confirming a particular transaction, verifying unreliable transactions or otherwise jeopardizing the network.In PoS, network users who are authorized to verify transactions are selected based on their participation, i.e., the amount of funds they hold in their portfolio. Under these conditions, those who hold the largest balances in the network are interested in its smooth operation and decentralization, otherwise their costly balances will lose value.
What blockchains use PoS?
PoS is a fairly old consensus algorithm, and is used by many block and piece chains. It was first introduced by Peercoin in 2012. PoS is also used by Nxt, Blackcoin, Stellar, Dash, Cosmos, Waves, ICON, and many others.
What is the difference between PoS and PoW?
Proof of Work, or PoW, is the initial consensus algorithm in cryptocurrent, based on the resolution of a certain mathematical task to obtain the right to verify, or sign, future transactions, and to receive a reward for doing so. The PoW process gives payments for block production to miners with the most powerful hardware in the network.Decentralization is achieved by the fact that transactions are verified by different randomly selected miners, with a block resolution probability corresponding to their computing power. In this case, 51% of the total computing power of the network must be obtained in order to carry out malicious actions, which is hardly possible in large networks.PoS requires much less computing power to verify transactions. In order to carry out an attack, a block producer must collect more than 51% of all network funds, which is even less possible than getting 51% of the power of the PoW.Furthermore, because there is no need to perform long and bulky calculations, PoS block chains are much faster than PoW, and transactions can be confirmed in seconds.
How does PoS staking work?
To start checking blocks and earning rewards, a block chain node must put funds into play with the system. Staking involves freezing a portion of the balance in exchange for the right to verify transactions. This wagering is a form of security deposit for the system, a value that can be lost if a node operates incorrectly or maliciously.Once the right to verify transactions has been obtained, the block producer is allowed to verify all outstanding transactions by checking the accuracy of the funds transferred and their sources. In return, the block producer is rewarded with new coins. The amount of rewards that a block producer can obtain corresponds to the size of his stake.
The Safety of PoS
PoS is completely safe for the entire network in case no block-producing node collects 51% of all parts involved. This attack is possible but unnecessary, as any possible profit from it will be ruined by the fact that the attacked network will lose value and all those pieces, as well as the profits, will be worthless.
What is staking?
Staking is participation in the delegated proof of interest process by delegating a portion of the balance to a block producer, in order to give the producer the right to participate in and benefit from the block production process. Delegators receive a portion of the rewards commensurate with their stake.
Why do blockchains need staking?
Staking is a vital process for DPoS block chains. It allows the selection of the best block producers to do the job, ensures decentralization and minimizes the risk of ruining the network. Staking allows more block producers to be involved in the block chain and more network users to receive rewards.In addition, compared to mining, staking does not require a lot of energy and expensive specialized equipment to operate large networks of block chains with high transaction rates.
How does staking affect decentralization?
The stake plays a major role in the decentralisation of the block chain. First, most DPoS coins choose a predefined number of delegates to take part in the process (from 20 to 100, depending on the coin) and all of them have an equal chance of receiving a prize, compared to sharing this chance based on the stake itself. This means that the 51% problem does not occur in DPoS block chains and only one of the highest slope balances is required to participate in the verification process.Secondly, the delegates have the choice of who to give the rate to. Distrustful delegates who do not fully respect the principles of decentralisation will quickly lose their share to trusted and reliable validators. This is part of healthy competition, and in the end only those stable and strong delegates who are good for the block chain are chosen.Finally, the large number of portfolios that receive awards ensures the sustainable issuance of new coins and saves the whole network from inflation.
Why staking is safe?
While "delegating" sounds like sending someone funds, in fact the term only corresponds to freezing the rate in the wallet. Physically, all stakes remain in the delegate's wallet and can be spread out at any time. Delegates have absolutely no control over the funds that are held in them and cannot send or sell them.
How staking can be profitable?
DPoS is a transaction verification process. Those who participate receive rewards for issuing new currencies and transaction fees. These rewards are shared with delegates according to the size of their wagers.If your participation forms 10% of the delegate's wager balance, you will receive 10% of all delegate rewards minus your commission.+
How staking is different from mining?
Staking and mining provide essentially the same function of selecting random nodes to check all upcoming transactions for rewards. However, mining does this by giving the miners large amounts of mathematical work to solve the task. Thus, large networks with great competition between the miners require very powerful and expensive specialized mining hardware, which also requires a lot of power, cooling and maintenance.DPoS staking selects nodes that do the work using a social factor, and requires no special powerful hardware to run the network. Furthermore, there is no mathematical work that takes time. Staking is cheaper, faster and more sustainable than mining.
How to select a staking service?
Finding a great staking service requires a bit of searching, but it pays off in more stable and correct reward. The specialized websites that catalog and provide statistics for all the betting services for the currency of your choice are useful when you are looking for a reliable service for your betting needs. The things you should be looking for are the low number of lost blocks, the large betting balance, the accuracy of the rewards and, of course, the user reviews. The involvement of the picketing services in the coin community is also valuable. Do they develop any educational material or tools for currency? They are useful in online coin communities, forums, Facebook page? Do they participate in project development? All that matters.
What is baking
“Baking” is the act of signing and publishing blocks to the Dune 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 Dunes in that process.
What is proof of work ?
Bitcoin has mining, Dune has Baking. In Bitcoin, miners compete to publish blocks containing a proof-of-work stamp by repeatedly hashing block headers. In Dune, 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 Dune token or Tezos Token (or rather a roll, see below) they own (or that is delegated to them) is randomly selected to create a block.
Tezos and Dune are "Baked" using "Proof of Stake" which is much less power intensive, more democratic, and puts the control back in the hands of the actual Dune owners instead of powerful crypto miners. To create a new Tez, an owner is called on randomly by the Dune Blockchain. The more Tezos or Dune 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 and Dune at a moment's notice whenever the system calls or you risk losing your opportunity to grow your Dune ownership.
Do you control my crypto ?
Since Dune Baking requires an account to have at least 8,000 Dune to make up one role,
many Dune coin holders will decide to delegate their coins rather than bake themselves.
Why I've to bake with elite chain ?
For most Dune 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.
What about the code on Dune and Tezos
In Dune, 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.
What are the Risks?
Tezos and Dune use a delegated proof-of-stake model (DPOS). In Dune, delegation is the permission given to a Baker to create new blocks using Tezos or Dune that other stakeholders have. This is important so that the consensus system happens in Tezos or Dune network, allowing everyone to participate. In addition, delegating their Dunes is always the best way to protect against the inflation generated by the protocol, which is currently 5.5% per year.
What are the Benefits?
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.
What is the Process?
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.
What is a blockchain? And, what does it solve?
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.