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What Is Proof of Authority (PoA)?

Proof of Authority (PoA) was introduced in 2017 by Gavin James Wood, co-founder of Ethereum and creator of Polkadot. PoA is a consensus algorithm that provides a practical, energy efficient, and effective solution on the blockchain. In PoA, block validators are not required to stake cryptocurrencies as in Proof of Stake (PoS) or provide hash rates as in Proof of Work (PoW). Instead, validators use their identities and reputations to validate blocks. Each miner or network participant wishing to add a new block must prove his reputation and authority on the network. In short, PoA leverages the value of authenticated identities in the network.


How Does It Work?

PoA provides the right to create a new block for the Node with a verified identity and proven authority on the network. Nodes eligible for creating new blocks are called validators. Validators act as moderators that validate blocks and transactions.

How to Become a Proof of Authority (PoA) Validator

Although conditions vary by system, a user must meet the following three key requirements to be selected as a validator:

  • A validator needs to have a work ethic and be reliable.

  • A validator’s identity and public information must be verified on the network.

  • A validator must be willing to invest currency and risk his own reputation.

Advantages of Proof of Authority (PoA)

Proof of Authority (PoA) differs from other consensus mechanisms, Proof of Work (PoW) and Proof of Stake (PoS), by its two main functions:

  • Validation procedures in Proof of Authority (PoA) are performed with less energy consumption compared to other protocols.

  • The number of transactions performed in a second is higher than other consensus mechanisms.

Disadvantages of Proof of Authority (PoA)

  • As the validators are predetermined, Proof of Authority (PoA) may not be considered a decentralized structure. Proof of Authority (PoA) is an attempt to increase the efficiency of centralized systems.

  • Everyone can see the validators. The fact that a validator’s identity is public means there is a higher risk of manipulation.