Delegated PoS and Why You Should Vote

There are a couple of coins out there that are slowly picking up in volume and price. Some are a little more mainstream such as Lisk, and some are slightly more lowkey such as Ark. Both of these tokens, and many more with a delegated proof of stake (DPoS) are quite revolutionary and a great step forward from Proof of Stake.

Proof of Stake requires people to have a wallet running on their computer (open) with tokens in the wallet. This is great for a few reasons. First, when people stake their coins, this means they are holding the tokens and are NOT going to sell. It creates a higher demand of the coin when they are being staked causing and increase in value. PoS coins generally don't require special hardware in contrast to mining and for this reason is beneficial even to the smallest of investors. PoS is more energy efficient compared to mining and for this reason, there are many tokens (including ether) that are looking to switch to PoS. Everyone should be staking their tokens, but many are not and here is why. Having to have your computer on all the time to stake the coins costs energy. Many times, the reward for your staking is not enough to offset the energy costs, and for this reason staking your coins is not worth it.

This is where DPoS is much better. What happens with delegated proof of stake is that you vote on delegates to stake for you. This still requires the tokens to be in the wallet, and the wallet to be downloaded, giving value to the coin as mentioned above. However, there is a small downside to this. Voting generally requires one token as payment for your vote. However, now what happens is that the delegate that you voted for gets your tokens (like lease/lending, they cannot send or sell your coins or steal them) to create a pool to stake. They are the few people that have a core wallet online 24/7 for staking, but they use your tokens to stake as well. They then send out a percentage of their returns based on how much you have. You do not have to leave your wallet on after you vote and you get a passive return. With DPoS, you can change your vote and essentially work to remove delegates who are not contributing to the network. For this reason, token holders ALL can vote on whats best for the network in a democratic process. You won't have the issue like bitcoin where large entities control what happens to the network! Some networks have unlimited delegates, some have 51, some have 101, but it depends on each platform!

Calculation Example:
Say I own 1000 tokens and vote for a delegate who promises to give out 70% of each block reward. Now including you and the 99 other people who also voted with 1000 tokens, the delegate is staking with 100,000 tokens. He receives a block reward of 100 tokens based on staking 100,000. This means he will send 70 tokens out, and split it between everyone that voted for him. So you would get 0.7 tokens for that block reward. If you had voted with 50,000 tokens and the delegate has 100,000 tokens, you would get back 35 tokens.

With both PoS and DPoS, the more you stake, the more you get back, but with DPoS you don't have to have your wallet open and running!