Block Producer

November 21, 2023 - Around 3 mins mins to read

Understanding the Role of a Block Producer

A block producer is an essential component of blockchain ecosystems that utilize the Delegated Proof of Stake (DPoS) consensus mechanism. In DPoS, users have the ability to vote for block producers who are responsible for validating and generating blocks. Block producers, also known as delegates or witnesses, play a crucial role in creating new blocks that contain recent network transactions and provide evidence of the legitimacy of the blockchain’s current state.

The primary function of block producers is to gather transaction data and store it in blocks for validation on the blockchain network. Once prepared, these blocks are transmitted to the network for validation. Block producers upload the validated transaction data to the blockchain, ensuring the smooth functioning of the network.

Let’s use the example of EOS block producers to gain a deeper understanding of the concept. The EOS network is governed by decentralized entities known as block producers. These block producers are responsible for achieving consensus and delivering transaction or data blocks to the EOS network. Their role is similar to miners in a proof-of-work (PoW) network and staking nodes in a proof-of-stake (PoS) blockchain.

In a PoW blockchain like Bitcoin, miners utilize significant computing power to solve complex mathematical problems. Once a miner completes the equation, it is broadcasted on the network for verification by other miners, establishing consensus. The block is then added to the chain, and the miner receives a block reward before moving on to the next equation.

In a PoS network like Cardano, nodes stake a certain quantity of tokens, essentially locking them up in a specific wallet address for a set period. In exchange, they have the opportunity to be chosen to add the next block of transactions to the chain. While the selection process is somewhat randomized, factors such as the amount invested, staking duration, and node reputation are often considered.

Delegated Proof of Stake (DPoS) is a variation of PoS where validators are elected by the network’s token holders instead of being chosen randomly.

According to the EOS white paper, the EOS.IO application generates blocks through 21 producers known as “block producers.” These block producers are selected by the community using Delegated Proof of Stake (DPOS). DPOS offers advantages such as short block creation time, high efficiency, and minimal risk of forking.

In the EOS mainnet, all EOS token holders vote for 21 trusted accounts to act as block producers and make decisions on their behalf. The top 21 block candidates with the highest votes are chosen as block producers. These block producers contribute processing power and bandwidth to the EOS mainnet. Their main responsibilities include gathering transaction data, bundling it into blocks, and distributing these blocks to other block producers. Once the blocks are submitted to the blockchain and verified, the block producers receive rewards. However, if any of the top 21 block producers fail to generate blocks for 24 hours, they are removed from the list.

The EOS block producer initiative has gained significant attention, with even Google Cloud becoming a contender to become a block producer on the EOS network. This interest from major tech companies is a positive sign for similar ventures in the growing blockchain industry.