What is Block Producer?
Let's find out Block Producer meaning, definition in crypto, what is Block Producer, and all other detailed facts.
Block producers, also known as delegates and witnesses, are the people responsible for producing and verifying new blocks on the blockchain. This role is used in blockchain networks where Delegated-Proof-of-Stake (DPoS) is used as the consensus mechanism.
The key role of block producers is to collect transaction records and store them in blocks on the blockchain network for validation. Once the blocks are ready for validation, they are transmitted to the blockchain network. The transaction data is uploaded to the blockchain by block producers after validation.
Proof-of-Work (PoW) blockchains like Bitcoin (BTC) rely on miners to solve cryptographic puzzles and verify new blocks. This process requires specific hardware and a large amount of computing power.
Once a miner solves the puzzle, it is broadcast on the blockchain network to establish a consensus among other miners. The block is then added to the chain and the verifier receives a block reward.
Block producers on Proof-of-Stake (PoS) blockchains use a different strategy to validate blocks and add them to the chain. For example, the EOS network is governed by decentralized entities called Block Producers.
The EOS Block Producers are responsible for reaching consensus and producing data and transaction blocks on the blockchain network. The method had features of both Proof-of-Work mining and Proof-of-Stake staking.
In order to receive the opportunity to add the next block to the blockchain, nodes on Proof-of-Stake networks like Cardano have to stake a specific amount of tokens. This requires nodes to place the tokens in a specific wallet for a predetermined period.
Certain variables, like the amount of tokens invested, the time span of assets being staked, and the reputation of the node, can impact the node’s chances of being chosen as the next verifier and placing the block on the chain. Otherwise, the validators are chosen randomly.
In Delegated-Proof-of-Stake networks like EOS, validators are chosen by the token holders rather than a randomized system. DPoS is favorable for the fast block building time, high efficiency, and low risk of forking in the blockchain.
The EOS whitepaper outlines the delegation and validation processes. A block is generated by 21 producers, officially called “block producers”. The EOS community selects trusted accounts, referred to as trustees, to act as the block producers.
All EOS token holders in the EOS mainnet are able to vote for the block producers. The final selection consists of the top 21 candidates who received the most votes from the token holders.
The selected block producers support the EOS mainnet. They provide processing power and bandwidth. The key responsibility of block producers is gathering transaction data, sorting it into blocks, and transferring them to the rest of the producer network. They then submit the blocks to the blockchain for verification.
Block producers are rewarded once the verification process is completed. Block producers must continuously generate new blocks. If no new block is generated within 24 hours from the last, the producer is taken off the trustees' list.
The block producer model employed by EOS has received notable attention from centralized companies like Google Cloud. The Big Tech company is looking into employing a similar blockchain architecture for block generation.