Last April, we reported that Deutsche Telekom had made a ‘significant’ purchase of the Celo public blockchain’s cryptocurrency CELO. Celo is targeting mobile payments and decentralized finance (DeFi) with a particular emphasis on the underbanked. As Celo is a proof of stake blockchain, Deutsche Telekom delegates or stakes its CELO on validator nodes operated by its subsidiary T-Systems MMS. Today it was announced that Andreessen Horowitz (a16z) has also delegated its CELO tokens to T-Systems operated validators.
This is news because staking services is an innovative new business model for traditional telecoms firms. Startups run most staking services.
The original public blockchains such as Bitcoin and Ethereum used the energy-hungry proof of work to protect the blockchain from spam transactions. Modern blockchains often use proof of stake for security which uses cryptocurrency rather than energy to protect against attackers. If a staking node malfunctions or misbehaves, some of the cryptocurrency staked could be slashed or lost. Hence the need for technical know-how.
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