Proof of Authority

Written by Max Hinchman

Introduction

Proof of Authority (PoA) is an alternative consensus algorithm that uses the reputation and identity of the validating nodes instead of staking coins or other resources. While older consensus mechanisms like Proof of Work have proven to be effective, there are still issues with performance speed and scalability. Specifically for PoW, its decentralized network of nodes provides a secure and trustless network, but the current state of proof of work severely limits its ability to scale. PoA aims to resolve the performance and scalability issues of the older consensus mechanisms.

The PoA model depends on a limited number of pre-selected nodes that act as moderators. Instead of staking coins or other resources in order to validate transactions, the nodes offer their public identities and reputations. The process for becoming nodes in a proof of authority system include the following: confirmation of real identities, a certain level of difficulty, including testing, in order to incentive long term commitment, standardized system that is the same for all potential node candidates.

While Proof of Authority is a much faster and much more scalable consensus mechanism, it sacrifices decentralization. The centralized system brings into question issues with whether or not the blockchain is immutable. Also, the publicly known identities could potentially create unintended issues. Any malicious actor could target the known moderators in order to disrupt the system. While all consensus mechanisms have its pros and cons, the proof of authority model is more likely to be used by a private network looking for speed rather than immutability.

Suggested Reading

Proof of Authority Explained by Binance Academy

Proof of Authority: consensus model with Identity at Stake by POA Network

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