Proof of Work is a consensus protocol for achieving a unanimous validation of the member devices on a distributed network.
In PoW, the validators are those who solve the complex hashes and validate the transactions for adding them into the blocks they are creating. The whole process is carried out in 3 steps: a very complex mathematical challenge is proposed to the network of blockchain, the miners are then compete to solve the given problem which takes time and resources making it more costly for them, the first miner to solve the problem gets the chance to validate transactions, create a block, and receive reward afterwards.
As the mining process requires a high computational power and time to solve the complex problems, therefore PoW is considered as a costly consensus mechanism. Proof of Work is effective for large systems like bitcoin only, ensuring security for them as the attackers require 51% of the whole network power to get their attack successful making it difficult in fact impossible to temper. But for small systems, PoW cannot ensure the security because it is relatively easier to own more than 51% of the computational power, at lower cost.
PoS is the consensus mechanism in which the number of coins hold by a miner is directly proportional to the chances to mine the block or transactions.
This means that the more coins a miner owns, the more mining power he/she has. As compared to the PoW consensus protocol, PoS requires less computational power as the opportunity to mine now more depends on the number of coins a miner holds and less depends on the computational power he/she has. This makes PoS a relatively cost efficient consensus protocol. Besides its cost efficacy, PoS has a disadvantage in terms of authority where the stakeholders who own more coins, enjoy the extensive control over the both technical and economic aspects of the network which let them to make any changes they like without considering the will of the community, developers, and miners. This defeats the purpose of a distributed network where everyone gets involved in making consensus.
DPoS is the decentralized, fast, secure, and efficient consensus mechanism, which leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way.
In DPoS, those who hold the network token are given the opportunity to cast votes to elect block producers. For selecting the block producers, the votes from the stakeholders are weighted by the stakeholder’s stake, and the block producer candidates that receive the most votes are those who become delegates. The delegates are the community members who validate the transactions and add them to the block. On block creation, the delegates get reward. While there are problems with both democracy and corporate governance, one important feature of DPoS that sets it apart from other consensus mechanisms is the open-source nature of these protocols which means that if users disagree, they can fork. The flexible and transparent nature of DPoS makes it useable for entire blockchains or as a consensus algorithm for sidechains, private blockchains, and more. In addition to this the lower fees, fast confirmations and the potential for increased profitability makes the DPoS a perfect democratic consensus mechanism.