Proof-of-Authority (PoA)

Understanding Proof-of-Authority (PoA)

Proof-of-Authority (PoA) is a consensus mechanism that relies on reputable validators to generate blocks and contribute computational power to a network. It utilizes the Byzantine Fault Tolerance (BFT) algorithm and emphasizes the importance of identity in the process.

PoA is specifically designed for enterprises or private organizations that aim to create closed chains without the need for general user participation.

Unlike other consensus mechanisms, PoA does not require mining activity since it operates on a permissioned network. However, participants can still ensure redundancy by running multiple nodes under the same identity.

While PoA is not resource-intensive, it does require validators to maintain the integrity of their nodes. This mechanism incentivizes honest behavior and adherence to network protocols due to the stake placed on user identity and reputation.

For PoA to function effectively, three conditions must be met:

1. Validators must have formal identification on-chain.
2. Validators must meet eligibility criteria, such as association with the organization or possessing a good reputation.
3. Validators must strictly adhere to the defined procedures for block production and validation on the network.

Furthermore, PoA networks can adopt design and operational aspects from existing public blockchains like Ethereum or Cardano, with some notable modifications.