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PoA / Proof of Authority explained

What is Proof of Authority?

Proof of Authority (PoA) is a reputation-based consensus algorithm that introduces a practical and efficient solution for blockchain networks (especially the private ones). The PoA consensus algorithm leverages the value of identities, which means that block validators are not staking coins but their own reputation instead. Therefore, PoA blockchains are secured by the validating nodes that are arbitrarily selected as trustworthy entities.

The PoA model

The Proof of Authority model relies on a number of block validators and this is what makes it a scalable system. Blocks and transactions are verified by pre-approved participants, who act as moderators of the system.


An effective solution

PoA consensus algorithm may be applied in a variety of scenarios and is deemed a high-value option for logistical applications. When it comes to supply chains, for example, PoA is considered an effective and reasonable solution. 


No need for mining

The Proof of Authority model enables companies to maintain their privacy while availing the benefits of blockchain technology. For example, it provides solutions with a system that does not require a native currency, as there is no need for mining.

Proof of Authority vs Proof of Stake

Some consider PoA to be a modified PoS, which leverages identity instead of coins. Due to the decentralized nature of most blockchain networks, PoS is not always suitable for certain businesses and corporations. In contrast, PoA systems may represent a better solution for private blockchains because its performance is considerably higher.

Conditions for Proof of Authority Consensus

Although the conditions may vary from system to system, the PoA consensus algorithm is usually reliant upon: 

  • valid and trustworthy identities: validators need to confirm their real identities.
  • difficulty to become a validator: a candidate must be willing to invest money and put his reputation at stake. A tough process reduces the risks of selecting questionable validators and incentivize a long-term commitment.
  • a standard for validator approval: the method for selecting validators must be equal to all candidates. 

More

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  • Proof of Stake explained

    Proof-of-Stake is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain.

  • Proof of Work explained

    Proof of work is a technique used by cryptocurrencies to verify the accuracy of new transactions that are added to a blockchain.

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