When it comes to Proof-of-Stake, a block producer is an important cog in the ecosystem as it is this person or group that has its hardware chosen to verify the transactions on a block, as well as begin the next block.
Block producers are vital to the operation of most Proof-of-stake (PoS) blockchains. These block producers are similar to miners in Proof-of-Work (PoW) chains, such as Bitcoin. Block producers are also known as delegates or witnesses and are in charge of producing new blocks that contain network transactions as well as evidence that the chain's present state is legitimate.
If it was not for the network of block producers, PoS networks would fail to operate and would not have valid blocks or transactions. These producers collect transaction data, store it in blocks to validate them on blockchain networks and thus allow for the full functioning of the blockchain.
Validation of transactions needs to occur before these transactions are transmitted to the blockchain, and again, this is part of the role of the block producers. Block producers who produce blocks upload the transaction data to the blockchain after they have been validated.
A good example of block producers in action can be found on the EOS blockchain. On EOS, there are block producers who are decentralized entities and they are there to ensure consensus is reached while delivering new data blocks to the EOS network. On the Bitcoin network, these producers operate in the same way as the miners.
The difference is, on Bitcoin, the miners utilize energy, which has its costs in order to solve equations and unlock new blocks. When a new block is mined, it is then broadcast to the rest of the network for other miners to verify the new block. After that, the block is put to the chain, the miner who completes the equation, receives his block reward, and everyone continues to the next equation.
The difference in PoS, like in Cardano for example, nodes stake some of their network tokens to be incentivized to be good actors, in exchange for the chance to unlock new blocks, and thus earn rewards. From here, one can start looking at different types of PoS, such as Delegated Proof-of-Stake (DPoS).
Delegated proof-of-stake is a variant of PoS in which validators are elected by the network's token holders rather than being picked at random. This is the method that EOS uses, and they have 21 selected producers — known as block producers. To maintain democracy and decentralization is that the community elects the block producers — also known as trustees.
The benefit of this method is shorter block creation time, great efficiency, and practically little possibility of forking. But, many still argue that EOS is subject to less decentralization and the ability to manipulate who the block producers are.
Being a block producer in EOS is a major responsibility as they perform many tasks to keep the network moving. These producers assist with the processing power and bandwidth of the mainnet but their primary responsibility is to gather data, tie it together, and then send on those blocks to other block producers for verification to finally get rewarded after the validation is done. However, if any of the top 21 block producers do not generate any blocks for the next 24 hours, they will be taken off the list.
DPoS has become attractive for a few major corporations who appreciate having the ability to select the block producers — this has led to Google Cloud looking to become a block producer contender on the EOS network.