Proof-of-Authority (PoA) Definition
The Proof-of-Authority (PoA) is a consensus mechanism in a private blockchain network where transactions and blocks are validated by approved accounts, known as validators. Nodes in PoA blockchains do not compete over solving complex mathematical problems as in other types of blockchains, but are rather pre-selected by the network.
Proof-of-Authority (PoA) Key Points
- Consensus mechanism in a private blockchain network
- Transactions and blocks are validated by pre-approved accounts
- There’s no competition in solving mathematical problems
- Validators are pre-selected by the network
What is Proof-of-Authority (PoA)?
Proof-of-Authority (PoA) is a consensus mechanism used in blockchain networks in which pre-selected nodes, referred to as validators, are given the responsibility of validating transactions and creating new blocks. This mechanism differs from mechanisms like Proof-of-Work (PoW) and Proof-of-Stake (PoS) where nodes compete to validate transactions and create new blocks.
Who uses Proof-of-Authority (PoA)?
The Proof-of-Authority consensus mechanism is mostly used in permissioned or private blockchain networks. These types of networks are often used by businesses or consortia of businesses that need to maintain control over the network’s operation.
When is Proof-of-Authority (PoA) used?
Proof-of-Authority is primarily used when a blockchain network requires high-speed transactions and the validators can be trusted not to act maliciously. These conditions are typically met in private or permissioned blockchain networks, where the validators are known, trusted entities such as companies or consortiums.
Why use Proof-of-Authority (PoA)?
PoA is utilized due to its simplicity and energy efficiency. Unlike other consensus mechanisms such as Proof-of-Work or Proof-of-Stake which require substantial computational power, Proof-of-Authority does not require nodes to perform complex calculations. Also, as validators are trusted entities, there is less risk of malicious activity.
How does Proof-of-Authority (PoA) work?
In a PoA network, a set number of validators are chosen who will validate transactions and propose new blocks. When a new block is needed, one of the validators will produce it. The other validators then confirm the block and add it to the blockchain if it’s valid. As validators are pre-selected, there is no competition, making the process more energy-efficient and faster compared to PoW or PoS mechanisms.
