Education FAQ

What Is Proof-of-Authority?

Blockchain consensus algorithms can be very confusing. Even proof-of-work throws people for a loop more often than not. In the case of proof-of-authority, the algorithm is very different from what one would expect. Now is a good time to see what it is all about.

The Proof-of-Authority Concept

Compared to proof-of-work, which relies on mining, or proof-of-stake, which requires users to hold their coins in a wallet, proof-of-authority is very different. It is an algorithm found within a few blockchain projects. It provides very fast transactions and a rather high transaction throughput. Especially when compared to Bitcoin, any network using PoA will see major improvements in these areas.

The way proof-of-authority works is by having transactions validated by approved accounts. Those users are known as validators, a concept that is quite common among some of the more popular altcoins. TRON, for example, uses a network of elected validators. EOS also has 21 validators which were decided upon some time ago.

To become a validator, users need to formally verify their identity on-chain. They also need to contend with how difficult it is to obtain eligibility. This position is a reward, rather than something that can be achieved in a few days. Additionally, they need to serve as an authority which is completely independent in the network’s checks and procedures.

Every validator under PoA rules will run software to let them put transactions in blocks. It is a completely automated process which doesn’t require users to be constantly monitoring their computers, although they must have a device capable of running around the clock. In this day and age, even a Raspberry Pi can be used for most of these purposes without any problems.

Every individual on a network utilizing proof-of-authority can become a validator, and there are incentives for existing contributors to maintain their status. It provides a digital reputation linked to one’s identity, a concept that has been explored by various projects for quite some time now. For validators, their reputation means everything, and upholding that reputation will force these users to stay on their best behavior.

The big question is whether or not proof-of-authority is suitable for public blockchains. On paper, this concept works for both public and private chains, but it seems that a lot of people take issue with the centralized nature of this concept when it comes to public blockchains. Even so, the projects currently working with this model have been getting a lot of positive attention.


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