🚨 Time is Running Out: Reserve Your Spot in the Lucky Draw & Claim Rewards! START NOW
Learn to gain real rewards

Learn to gain real rewards

Collect Bits, boost your Degree and gain actual rewards!

Video Courses
Video Courses
Scale your career with online video courses. Dive into your learning adventure!
Crypto Terms:  Letter B
Jun 19, 2023 |
updated Apr 02, 2024

What is Baker?

Baker Meaning:
Baker - a user on the Tezos blockchain responsible for appending new transaction blocks via the Proof-of-Stake baking method.
2 minutes

Let's find out Baker meaning, definition in crypto, what is Baker, and all other detailed facts.

Baking is a process native to the Tezos blockchain. Users known as bakers form new transaction blocks on the blockchain using the Delegated-Proof-of-Stake (DPoS) consensus mechanism. For each baked block, they receive rewards in XTZ, the native token of the Tezos blockchain network.

Tezos is a decentralized open-source blockchain. It is utilized for crypto transactions using the XTZ tokens and smart contracts. Developers can also use Tezos to create decentralized applications (dApps).

Bakers are typically more likely to bake a block the more tokens, referred to in the baking context as Rolls, they have. The minimum amount of tokens required to partake in baking is 10,000 XTZ.

Users that meet this threshold can choose to become a baker or an endorser. Bakers sign off and publish new transaction blocks on the Trezos blockchain and receive 16 XTZ per block as a reward for their work.

Endorsers are the verifiers of the new blocks on the chain. They ensure that the baking process was done correctly and the transaction information is correct. They receive 2 XTZ per block for their contributions.

Some users who hold originated accounts can register as delegates. If they meet the 10,000 XTZ criteria, their accounts may be delegated to be used in the baking process on behalf of other users who do not meet the minimum token threshold.

Unlike Bitcoin (BTC), which uses the Proof-of-Work (PoW) consensus mechanism referred to as mining, the blocks on the Tezos network are validated using Delegated-Proof-of-Stake. PoW is a physical mining process that requires high energy consumption and hardware resources.

DPoS uses virtual mining to bake the blocks. This method is more accessible and energy-efficient. Bakers need to maintain nodes to keep the network working, which requires hosting fees that they must cover themselves. Bakers receive XTZ tokens as a reward for validating the transaction blocks and maintaining the network.