Proof-of-Authority (PoA) Definition
Proof-of-Authority (PoA) is a consensus algorithm in blockchain technology that delivers comparatively fast transactions through a set of pre-selected validators. In a PoA-based blockchain, transactions and blocks are validated by approved accounts, known as validators. The process is automated and does not require validators to be constantly connected to the network.
Proof-of-Authority (PoA) Key Points
- PoA is a consensus mechanism in a private blockchain which serves as a more efficient and scalable alternative to Proof of Work (PoW) and Proof of Stake (PoS).
- Validators are pre-approved, and the role comes with both power and responsibility within the network.
- PoA is typically used in permissioned (private) blockchains where the validator’s identity is known and trusted.
- It provides faster transaction times and higher scalability than PoW and PoS.
What is Proof-of-Authority (PoA)?
Proof-of-Authority (PoA) is a consensus mechanism in a blockchain network where a limited number of nodes are given the authority to validate transactions. These nodes, known as validators, are trusted entities within the network. Unlike Proof-of-Work and Proof-of-Stake, PoA is based on the reputation of the validators which makes it a more efficient and scalable solution for private blockchains.
Why is Proof-of-Authority (PoA) important?
PoA is important because it provides a more efficient and scalable solution for validating transactions on a blockchain. It eliminates the need for miners to solve complex mathematical problems, as in PoW, or for stakeholders to lock up their tokens, as in PoS. This results in faster transaction times and higher scalability. Moreover, since validators are known and trusted entities, it reduces the risk of malicious activities on the network.
Who uses Proof-of-Authority (PoA)?
Proof-of-Authority is typically used in permissioned or private blockchains, where the identity of the validators is known and trusted. These could be corporate or consortium blockchains where the validators are entities like businesses, government departments, or other organizations. Examples of PoA blockchains include Ethereum’s Kovan test network and VeChain.
When is Proof-of-Authority (PoA) used?
PoA is used when a blockchain network requires fast and efficient transaction validation. It is particularly useful in private blockchains where the validators can be trusted entities. PoA is also used when the network needs to be scalable and capable of handling a large number of transactions.
How does Proof-of-Authority (PoA) work?
In a PoA-based blockchain, a set of validators are chosen who have the authority to validate and add new transactions to the blockchain. These validators are chosen based on their reputation and trustworthiness. When a new transaction is initiated, it is sent to a validator for validation. If the validator approves the transaction, it is added to the blockchain. The process is automated and does not require the validators to be constantly connected to the network.
