Proof of Authority (PoA) is a consensus mechanism used in blockchain networks, it is an alternative to traditional proof of work (PoW) and proof of stake (PoS) consensus mechanisms.
In PoA-based networks, validators (or “authorities”) are pre-selected by the network’s creators, they are trusted individuals or organizations that have been vetted and approved to participate in the network’s consensus process. These validators are responsible for validating transactions and creating new blocks, and they are incentivized to do so honestly by the rewards they receive for doing so.
The validators are identified by their digital signature and their reputation, which means that it is difficult to impersonate a validator, unlike PoW where you can use computational power to mine block, PoA is more efficient and faster, as the identities of the validators are known and their reputation is established.
Proof of Authority is suitable for private networks, consortium chains, or networks where the identities of the validators are known and can be trusted. It is also a more energy-efficient consensus mechanism than PoW, which makes it suitable for use in networks that need to process a large number of transactions quickly, such as supply chain management or enterprise-level applications.
Some examples of blockchain networks that use Proof of Authority include:
- Ethereum KOVAN testnet
- Quorum
- Parity
- VeChain
It’s worth noting that this list may not be exhaustive and new projects may emerge.
Is Proof of Authority better than Proof of Work?
Proof of Authority (PoA) and Proof of Work (PoW) are both consensus mechanisms used in blockchain networks, but they have different trade-offs and are better suited for different types of use cases.
One of the main advantages of PoA over PoW is that it is more energy-efficient. In PoW, validators (or “miners”) must use computational power to solve complex mathematical problems in order to create new blocks and validate transactions. This process consumes a significant amount of energy, and the costs associated with it can be high. In contrast, PoA does not require any computational power, as the validators are pre-selected and their identities are known, so it does not consume as much energy.
Another advantage of PoA is that it is more suitable for private networks, consortium chains, or networks where the identities of the validators are known and can be trusted. In these types of networks, it is important to have a high degree of security and control over who can validate transactions and create new blocks. PoA provides this by allowing the network’s creators to pre-select the validators, and it is difficult to impersonate a validator, as their digital signature and reputation are used to identify them.
PoW is more suitable for public networks, where anyone can participate as a miner and there is no central authority controlling the network. In a public network, it is important to have a decentralized and distributed consensus mechanism that allows anyone to participate and validate transactions. PoW provides this by allowing anyone with enough computational power to mine new blocks and validate transactions.
It’s worth noting that PoA is not necessarily better or worse than PoW, it depends on the use case and requirements of the network. PoA is more efficient, more secure and fast, but is less decentralized, while PoW is more decentralized but less energy efficient.
