Familiar algorithms like Proof of Work (PoW) and Proof of Stake (PoS) are used in many current Blockchains. However, each of these methods suffers from a poor transaction processing speed. Due to its ability to execute transactions per second more quickly, the Proof of Authority (PoA) algorithm is now the chosen technique for the Fahrenheit Blockchain.
What is Proof-of-Authority?
The PoA algorithm was born in 2017 and was named by Gavin Wood – co-founder and former CTO of Ethereum and Parity Technologies. PoA stands for Proof of Authority. This is a consensus mechanism that upholds the identity and reputation of the participants who validate transactions and add new blocks to the blockchain.
- Identity is something that only one person has. Validators must validate their true identities publicly so that they may readily demonstrate accountability in the blockchain's operation.
- It takes validators some time to develop their reputation. To become genuine individuals, they must have a tremendous deal of credibility. They have not committed any infractions in the past and have a certain network status. If there are any questionable actions, the reputation of the validator will suffer.
Proof of Authority (PoA) is a Proof of Stake (PoS) version. However, PoA is not dependent on the number of tokens validators possess. Instead of focusing on the monetary worth of the token, Proof of Authenticity emphasizes the identification of the validator. These individuals will stake their "reputation" in order to validate transactions.
What problem does Proof of Authority solve?
The birth of PoA marked a new development of the algorithm on the blockchain. PoA has helped to solve four main problems and PoW and PoS are facing before that are:
- Inexpensive energy use: PoA does not require as much computing effort and specialized equipment as PoW.
- Absolute security: If you want to be a validator of a transaction, a validator needs to verify your identity and build a reputation on the network. This completely eliminates bad nodes that sabotage the system and slow down transactions. This mechanism also helps to ensure that the validation results are valid, fair, and not subject to anyone's control.
- Fast transaction speed, great scalability: When a new block is formed, the system will randomly select a node to participate in transaction validation and add this block to the network based on the consensus of other nodes. PoA works on a limited number of validators. Therefore, PoA becomes a model with very fast transaction speed and great scalability.
- Provide stronger financial incentive for validators to operate: Unlike the PoS model, PoA does not need to consider the currency difference between validators. This helps ensure that all participants in validating the network are equally motivated to work for the success of the network and themselves. Moreover, after participating in transaction validation, the validator will receive a token of the blockchain as a reward. Therefore, they are more motivated to participate.
Last modified 8mo ago