TLDR - Bakers
Bakers are participants in the Tezos blockchain network who are responsible for validating and adding new blocks to the blockchain. They play a crucial role in maintaining the security and integrity of the network. Bakers are selected to create blocks based on their stake in the network, and they are rewarded with newly minted Tezos tokens for their participation. Bakers also have the ability to vote on proposed protocol upgrades and changes to the Tezos network.
What are Bakers?
Bakers are key participants in the Tezos blockchain network. They are responsible for validating and adding new blocks to the blockchain. Bakers play a crucial role in maintaining the security and integrity of the network by ensuring that transactions are valid and consensus rules are followed.
In order to become a baker, participants must hold a certain amount of Tezos tokens, known as a stake. The amount of stake held determines the probability of being selected as a baker to create a new block. Bakers are selected through a random process called "baking rights," which takes into account the amount of stake held by each participant.
Once selected, bakers are responsible for creating a new block by including a set of valid transactions. They must also include a proof-of-work, known as a "nonce," which is a random number that satisfies certain mathematical conditions. This proof-of-work ensures that bakers have invested computational resources into creating the block, making it difficult for malicious actors to manipulate the blockchain.
Rewards for Bakers
Bakers are rewarded for their participation in the Tezos network. When a baker successfully creates a new block, they are entitled to a reward in the form of newly minted Tezos tokens. The amount of reward received is proportional to the baker's stake in the network. Bakers with a larger stake have a higher probability of being selected to create a block and therefore receive a larger share of the rewards.
In addition to block rewards, bakers also receive transaction fees from the transactions included in the blocks they create. These transaction fees are paid by users who want their transactions to be prioritized and included in the blockchain quickly. Bakers have the ability to set their own fee levels, which can incentivize users to choose their blocks over others.
It is important to note that being a baker also comes with certain costs. Bakers need to invest in computational resources to create blocks and maintain a reliable network connection. They also need to ensure the security of their baking operations to protect against potential attacks or compromises.
Voting and Governance
Bakers in the Tezos network also have the ability to participate in the governance of the network. They can vote on proposed protocol upgrades and changes to the Tezos network. This governance mechanism allows bakers to have a say in the future direction of the network and ensures that decisions are made in a decentralized and inclusive manner.
Each baker's voting power is proportional to their stake in the network. Bakers can vote directly or delegate their voting power to another participant, known as a delegate. Delegation allows bakers to participate in the governance process without actively voting themselves. Delegates can be other participants or specialized entities that offer delegation services.
The voting process in Tezos is designed to be transparent and secure. Each vote is recorded on the blockchain, ensuring that the results are tamper-proof and auditable. This allows for a high level of trust in the governance process and ensures that decisions are made in the best interest of the Tezos community.
Bakers are essential participants in the Tezos blockchain network. They validate and add new blocks to the blockchain, maintain the security and integrity of the network, and participate in the governance process. Bakers are rewarded for their participation with newly minted Tezos tokens and transaction fees. Their stake in the network determines their probability of being selected as a baker and their voting power in the governance process. Bakers play a crucial role in the decentralized and inclusive nature of the Tezos network.