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proof-of-authority

What is Proof of Authority (PoA)? Everything you need to know about (PoA)

One of the several consensus algorithms is Proof of Authority. In this algorithm, consensus is reached by several selected validators. These validators are selected in advance by the network. However, this group of nodes is a lot smaller than with algorithms such as Proof of Work and Proof of Stake. In this article we are happy to explain what Proof of Authority is, how it works and what the known advantages and disadvantages are.

What is Proof of Authority?

Unlike Proof of Work and Proof of Stake , there is no mining mechanism involved. There are different types of PoA protocols, and they vary depending on how they actually work.

The Proof of Authority algorithm is more recent than both the PoW and PoS consensus algorithms. It was developed in 2017 by Gavin Wood. He did this as a solution for Ethereum- based blockchains. Gavin is also a co-founder and former CTO of Ethereum.

Initially, the PoA algorithm was created to counter spam attacks on Ethereum’s Ropsten test network. However, the algorithm can power multiple types of systems, including enterprise supply chain solutions.

The algorithm selects a limited number of nodes that are responsible for validating transactions according to certain strict rules. These nodes become the only ones that keep the network working. We also call these nodes the ‘authorities’.

How does Proof of Authority work?

The Proof of Authority consensus algorithm , as we just mentioned, was developed primarily as a solution to the problem of spam attacks on Ethereum’s Ropsten test network. The new network was called Kovan and is a primary test network currently available to all Ethereum users.

Proof of Authority consensus is essentially an optimized proof of stake model that uses identity as a form of stake. In the Proof of Stake model, nodes must contain tokens or crypto coins as a form of stake. The identity is plotted by a group of validators (authorities) that are pre-approved to validate transactions and blocks within the network. The group of validators is actually only a small group in almost all cases. There’s a reason. In this way, the network wants to remain efficient and guarantee security.

The main characteristics of a PoA network are a low computational power requirement, not a requirement of communication between nodes to reach consensus. But another feature is that the continuity of the network is independent of the number of nodes available, as they are pre-approved. This provides various advantages, which we would like to tell you more about.

Proof of Authority Benefits

In the Proof of Authority model, a person’s identity is used as the stake. This is to guarantee safety. With Proof of Work and Proof of Stake, this is done in a completely different way. This ensures that Proof of Authority has several advantages compared to the aforementioned algorithms.

Relatively high transaction ratio.

Blocks are generated in an order at a specified time interval by authorized nodes. This increases the speed at which transactions are validated.

Predictable time interval between new blocks.

That’s something we don’t see with Proof of Work and Proof of Stake. Here, the time interval between the new blocks varies.

Nodes do not require expensive hardware.

Compared to the Proof of Work algorithm, Proof of Authority does not require nodes to purchase expensive hardware to handle the computing power. So it is much easier for newcomers to get in.

Disadvantages of Proof of Authority

The whole idea of ​​Proof of Authority is that it forgoes decentralization. So you could say that this consensus algorithm model is just an attempt to make centralized systems more efficient. Although Proof of Authority seems an attractive solution for large companies with logistics needs, it also comes with drawbacks. Especially in the field of cryptocurrency.

But we also hear other drawbacks about Proof of Authority. Thus, the identity of the validators is visible to everyone. This allows validators to use their ‘fame’ for certain things. According to many, that is not exactly the intention.

It can also be dangerous for the network. Because when everyone knows who the validators are, it is easy for malicious people to extort someone into making certain choices. Manipulation is therefore a major threat to blockchains that use Proof of Authority. We have to make a side note here: Proof of Authority is mainly used by private blockchains. The blockchains are therefore often completely shielded from the outside world. The identity is therefore not visible to everyone in all cases.

The difference between

What is Proof of Authority?

Unlike Proof of Work and Proof of Stake , there is no mining mechanism involved. There are different types of PoA protocols, and they vary depending on how they actually work.

The Proof of Authority algorithm is more recent than both the PoW and PoS consensus algorithms. It was developed in 2017 by Gavin Wood. He did this as a solution for Ethereum- based blockchains. Gavin is also a co-founder and former CTO of Ethereum.

Initially, the PoA algorithm was created to counter spam attacks on Ethereum’s Ropsten test network. However, the algorithm can power multiple types of systems, including enterprise supply chain solutions.

The algorithm selects a limited number of nodes that are responsible for validating transactions according to certain strict rules. These nodes become the only ones that keep the network working. We also call these nodes the ‘authorities’.

How does Proof of Authority work?

The Proof of Authority consensus algorithm , as we just mentioned, was developed primarily as a solution to the problem of spam attacks on Ethereum’s Ropsten test network. The new network was called Kovan and is a primary test network currently available to all Ethereum users.

Proof of Authority consensus is essentially an optimized proof of stake model that uses identity as a form of stake. In the Proof of Stake model, nodes must contain tokens or crypto coins as a form of stake. The identity is plotted by a group of validators (authorities) that are pre-approved to validate transactions and blocks within the network. The group of validators is actually only a small group in almost all cases. There’s a reason. In this way, the network wants to remain efficient and guarantee security.

The main characteristics of a PoA network are a low computational power requirement, not a requirement of communication between nodes to reach consensus. But another feature is that the continuity of the network is independent of the number of nodes available, as they are pre-approved. This provides various advantages, which we would like to tell you more about.

Proof of Authority Benefits

In the Proof of Authority model, a person’s identity is used as the stake. This is to guarantee safety. With Proof of Work and Proof of Stake, this is done in a completely different way. This ensures that Proof of Authority has several advantages compared to the aforementioned algorithms.

Relatively high transaction ratio.

Blocks are generated in an order at a specified time interval by authorized nodes. This increases the speed at which transactions are validated.

Predictable time interval between new blocks.

That’s something we don’t see with Proof of Work and Proof of Stake. Here, the time interval between the new blocks varies.

Nodes do not require expensive hardware.

Compared to the Proof of Work algorithm, Proof of Authority does not require nodes to purchase expensive hardware to handle the computing power. So it is much easier for newcomers to get in.

Disadvantages of Proof of Authority

The whole idea of ​​Proof of Authority is that it forgoes decentralization. So you could say that this consensus algorithm model is just an attempt to make centralized systems more efficient. Although Proof of Authority seems an attractive solution for large companies with logistics needs, it also comes with drawbacks. Especially in the field of cryptocurrency.

But we also hear other drawbacks about Proof of Authority. Thus, the identity of the validators is visible to everyone. This allows validators to use their ‘fame’ for certain things. According to many, that is not exactly the intention.

It can also be dangerous for the network. Because when everyone knows who the validators are, it is easy for malicious people to extort someone into making certain choices. Manipulation is therefore a major threat to blockchains that use Proof of Authority. We have to make a side note here: Proof of Authority is mainly used by private blockchains. The blockchains are therefore often completely shielded from the outside world. The identity is therefore not visible to everyone in all cases.

The difference between Proof of Authority and Proof of Stake

Many feel that Proof of Authority is a modified version of Proof of Stake. However, there is a big difference between these two algorithms. At Proof of Stake, nodes bet money to be allowed to validate. With Proof of Authority, nodes deploy their identity.

Proof of Authority is also used more often for companies and organizations. Proof of Stake is often not suitable for this. The user situations between these two algorithms also differ.

Who uses Proof of Authority?

The Proof of Authority was first used for Ethereum’s Kovan testnet. Now other well-known blockchains use the Proof of Authority algorithm. Think of blockchains such as VeChain and PAO Network.

These blockchains have custom validation processes for governments. In both cases, the network uses strict selection criteria for choosing validators, as their reputation guarantees the integrity of the entire system.

Conclusion

It is now clear to you what Proof of Authority is. Obviously, Proof of Authority is one of the best options for private blockchains right now. The reason for this is the ability to reach consensus. At the same time, the decentralization of the network is maintained. That is more than unique for consensus algorithms.

For companies that want to implement their own blockchain , Proof of Authority would be the best option in terms of consensus algorithm. This way they can safely increase the productivity of the company, using a blockchain solution.

and Proof of Stake

Many feel that Proof of Authority is a modified version of Proof of Stake. However, there is a big difference between these two algorithms. At Proof of Stake, nodes bet money to be allowed to validate. With Proof of Authority, nodes deploy their identity.

Proof of Authority is also used more often for companies and organizations. Proof of Stake is often not suitable for this. The user situations between these two algorithms also differ.

Who uses Proof of Authority?

The Proof of Authority was first used for Ethereum’s Kovan testnet. Now other well-known blockchains use the Proof of Authority algorithm. Think of blockchains such as VeChain and PAO Network.

These blockchains have custom validation processes for governments. In both cases, the network uses strict selection criteria for choosing validators, as their reputation guarantees the integrity of the entire system.

Conclusion

It is now clear to you what Proof of Authority is. Obviously, Proof of Authority is one of the best options for private blockchains right now. The reason for this is the ability to reach consensus. At the same time, the decentralization of the network is maintained. That is more than unique for consensus algorithms.

For companies that want to implement their own blockchain , Proof of Authority would be the best option in terms of consensus algorithm. This way they can safely increase the productivity of the company, using a blockchain solution.

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