Delegated Proof-Of-Stake
No one would have faith in a blockchain without security. Steemit gets its security from the entrusted proof-of-stake algorithm, initially built for Larimer's BitShares project, and which is a difference of proof-of-stake. An actual proof-of-stake algorithm, like peercoin, depends on those who own the currency to validate transactions.
The more a currency is held by many people, the more secure the system. Within a delegated proof-of-stake network, the community votes for individuals referred as witnesses, to be accountable for substantiating transactions.
Proof-of-stake is an actual democracy which is the same as old Athens, which is the simplest way to think about such. Delegated proof-of-stake is similar to a democratic republic such as the U.S. With that sense; witnesses are like a congressman, where they are elected by the community and become accountable for securing the network.
Nonetheless, the analogy ends there since witnesses can be kicked for not doing their job well; something the US Congress has been resistant for some time. Regarding Steemit, Scott said, “It is a paid position, and we are not talking about four-year terms. But we are conversing with individuals with very particular jobs, to generate and verify blocks.”
Altogether, there are 21 witnesses obligated for building and signing transactions’ blocks every time a block is made. As described above, the first 19 are voted for and then there is a 20th witness (random) who may not be in the leading 19 while the 21st observer is a miner performing the typical proof-of-work.
As elaborated in the Steemit white paper, this process is designed to offer the best consistency while making sure that everyone can take place in block production despite being trendy to get voted to the top or not.
New, But Growing
Since propelling in value to more than $400m, Steem has cooled to approximately market-cap of $157m; however, this makes it one of the 6th biggest cryptocurrencies on the space. While there are pessimists, the realism is that Steemit has more people joining and contributing.
It is not just “Steemit the social media site”, but the blockchain that has witnessed incredible development. According to Scott, developers and entrepreneurs have already created 50 various devices, such as “Catch a Whale” which tracks where whales have recently voted and “SteemMarket” which permits users to buy, sell or rent goods with Steem.
Scott said, “People who come into this platform are going openly to the blockchain. We have no right to tell them not to. Indeed, we implore it. What we set out to carry out is to construct an ecosystem, and that’s precisely what is occurring.” It seems Steemit has built a 'niche for content creators' who are searching for ways of generating income.
