In the cryptocurrency ecosystem, there is a term validator who has an important role in maintaining the security and integrity of the blockchain network. Validators also have several types. So, how do validators work and what are their roles? Read this article to the end to find out.
Definition of validator in cryptocurrency
Validator are entities in a blockchain network whose job is to verify and validate transactions entered into new blocks. Validator plays a key role in the consensus process, namely ensuring that each transaction included in a block is valid and complies with established protocol rules.
How validators work
1. Validate transactions
Validator accept new transactions submitted by users and verify them to ensure that they are valid and eligible to be included in a new block.
2. Create blocks
Once valid transactions are collected, Validator combines them into a new block and adds it to the blockchain. This process is called "mining" or "creating blocks".
3. Using consensus criteria
Validator uses consensus criteria established by the blockchain protocols they support to determine which transactions are worth including in blocks and propagating to the network.
4. Earning rewards
In exchange for their contributions in validating transactions and maintaining network security, validators are often rewarded with crypto tokens or transaction fees by the network.
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The important roles of validator in cryptocurrency
1. Maintain network security
Validator plays a key role in maintaining the security of blockchain networks by validating transactions and preventing duplicate transactions or other manipulation.
2. Maintain blockchain integrity
By ensuring that each block added to the blockchain is valid and meets protocol rules, validators help maintain the integrity and reliability of the blockchain.
3. Facilitate consensus
Validator facilitate the consensus process in blockchain networks by verifying transactions and determining the correct version of the distributed ledger.
4. Encouraging decentralization
In a decentralized blockchain network, validators help in distributing power and ensuring that no single entity controls the network as a whole.
Also Read: What Is Smart Contract?
Types of validators in cryptocurrency
1. Validator Proof of Work (PoW)
PoW validators are entities that use computing power to mine new blocks in a blockchain network. PoW must complete the complex cryptographic task of adding blocks to the blockchain.
2. Validator Proof of Stake (PoS)
PoS validators are entities responsible for validating transactions based on the number of crypto tokens they hold. PoS is required to deposit a certain amount of tokens as collateral to become a validator.
3. Validator Delegated Proof of Stake (DPoS)
DPoS validators are entities chosen by token holders to represent them in validating transactions and creating blocks in the blockchain network. DPoS selected through a democratic election process.
Conclusion
Validators play a very important role in the cryptocurrency ecosystem by validating transactions, maintaining network security, and facilitating the consensus process. With different types of validators available, such as PoW, PoS, and DPoS, each blockchain network has different mechanisms to ensure security and reliability. Therefore, a good understanding of the role and function of validators is important for anyone involved in the cryptocurrency industry.
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What is Over-the-Counter (OTC) Trading?
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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