What is the Proof of Authority (PoA)?

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What is the Proof of Authority (PoA)?

In the blockchain, the application of a protocol relies on the implementation of what is called a consensus algorithm. There are several of them and the Proof of Authority (PoA) is one of them.

So why is an algorithm essential in the blockchain? What is the Proof of Authority?

Why is the consensus algorithm necessary?

There are several essential criteria that govern the allocation of blocks and the validation of data in a blockchain and the consensus algorithm, whatever it is, is one of them. Indeed, the functioning and the level of security of the blockchain are governed by a set of rules, the crypto protocol. More than being defined, these rules must also be applied as they should be and this is where the consensus algorithm comes into play.

It is therefore impossible for the blockchain to do without a consensus algorithm. Several possibilities can therefore be envisaged, such as the Proof of Work (or PoW), which is the first solution to have been implemented and which is based on the concept of mining, which is very characteristic of the blockchain since it is used by Bitcoin. However, there are alternatives to this algorithm, including the Proof of Authority (PoA).

What is the Proof of Authority (PoA)?

Like PoW and many others, the Proof of Authority (PoA) is a consensus algorithm whose purpose is to enforce the blockchain protocol. It therefore allows to validate transactions and other interactions with the network, but also to update its more or less distributed register. This right is given to a limited and designated number of actors.

Indeed, one or more machines will have the role of generating each block of transactions that will be included in the blockchain. Each block can then be accepted without verification, either unanimously or by a majority, depending on the chosen configuration. This explains why a number of validators are defined and designated from the outset for this purpose.

Advantages and disadvantages of PoA

The Proof of Authority (PoA) has several advantages and disadvantages. First of all, it frees us from the technical competition associated with the mining system, since the mechanism requires practically no computing power. This is a definite advantage in terms of energy savings.

Thanks to the limited number of players, updates are made more frequently, which allows for a reduction in blocktime and an increase in blocksize with costs close to zero. The Proof of Authority (PoA) also makes it possible to do without native assets and does not tie up any particular capital.

The advantages of the Proof of Authority are therefore numerous, but it is important to remember that the blockchain is still controlled by a limited number of individuals. This full power also gives the possibility to prohibit certain transactions and sometimes generate conflicts of interest or even jeopardise the security of the network.