Crypto Terms: Letter B

What is Baking?

Baking - the Proof-of-Stake method used on the Tezos blockchain to create new transaction blocks.
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Let's find out Baking meaning, definition in crypto, what is Baking, and all other detailed facts.

Baking is the Proof-of-Stake process used to confirm new transaction blocks onto the Tezos blockchain. Tezos stakers, known as bakers, receive rewards for each newly baked block.

To become bakers, Tezos users require a minimum of 10,000 Tezos (XTZ), the native currency. Those who have met the minimum threshold can choose to become bakers or endorsers.

Tezos bakers are responsible for running nodes that maintain the network. Through this process, they can produce new blocks on the blockchain. For each newly baked block, they can be rewarded with XTZ tokens.

Tezos users can have one of the two account types on the blockchain.

The first category is implicit accounts. Only implicit accounts are able to participate in the baking process. Owners of implicit accounts can bake blocks using their own XTZ balance or utilize delegated accounts.

The other type is called originated accounts. These accounts cannot participate in the baking process directly but they can be delegated. By using a special key, the originated accounts can take part in the consensus mechanism. Using a delegated account allows bakers to claim their staking rewards without maintaining a node on their own.

Delegation is the recommended method of baking for an average user. Implicit accounts are responsible for hosting and maintaining a node. If a node is configured incorrectly, the netowrk may encounter issues like double baking.