Baking

Understanding the concept of baking is essential to grasp the inner workings of the Tezos blockchain. Baking, in the context of Tezos, refers to the process through which new transaction blocks are added to the blockchain. Unlike other blockchain networks, Tezos employs a delegated-proof-of-stake (DPoS) consensus mechanism, where bakers are responsible for validating transactions and adding them to the blockchain.

Tezos incentivizes its bakers by rewarding them for their participation in the baking process. However, to become a baker, one must meet certain requirements. In the case of Tezos, a minimum of 10,000 XTZ, the native currency of the Tezos blockchain, is required to become a baker and actively participate in the network’s consensus mechanism.

Once the threshold of 10,000 XTZ is met, individuals have the option to become either a baker or an endorser. Choosing to become a baker involves running a full-node, which is a complete copy of the blockchain, to uphold the network’s integrity and generate new blocks. Bakers play a crucial role in the consensus algorithm by verifying and validating transactions. In return for their efforts, bakers receive additional XTZ tokens as a form of reward.

It is important to note that the baking process in Tezos involves two distinct types of accounts. The first type is implicit accounts, which have the privilege to participate in the baking process. With an implicit account, one can choose to bake using their own XTZ balance or delegate the baking process to another account. This delegation mechanism allows individuals to participate in the consensus algorithm without the need for a substantial XTZ balance.

The second type is originated accounts, which can be delegated but are unable to directly engage in the baking process. These accounts require a special delegation key to participate in the consensus algorithm. It is worth mentioning that delegates can be reassigned, allowing users to switch their delegated bakers at any time.

Delegation plays a significant role in the baking process as it allows for a more decentralized and distributed network. It enables token holders who do not have the technical expertise or resources to become active bakers to still participate and contribute to the consensus algorithm. By delegating their XTZ, token holders can support a baker of their choice, and the rewards generated from the baking process are distributed accordingly.

Choosing a reliable and trustworthy baker to delegate to is crucial in the Tezos ecosystem. Bakers are ranked based on their performance, reliability, and the rewards they distribute to their delegators. Token holders should conduct research to select a baker that aligns with their preferences and objectives.

It is also worth noting that Tezos has implemented a mechanism called “roll size” to increase the security and efficiency of the baking process. A roll represents a specific amount of XTZ and serves as a unit of participation in the baking process. Currently, a roll size in Tezos is set to 8,000 XTZ. Each roll is randomly assigned to a baker, ensuring a fair distribution of the baking process among participants.

In conclusion, baking in Tezos refers to the process of validating transactions and adding them to the blockchain. Bakers play a crucial role in the consensus algorithm and are rewarded for their efforts with additional XTZ tokens. The baking process involves two types of accounts, implicit and originated, allowing individuals to participate directly or delegate their baking rights. Delegation enables a more decentralized network and offers token holders the opportunity to contribute to the consensus algorithm. Choosing a reliable baker to delegate to is important, and the roll size mechanism ensures fair participation in the baking process.