What is Proof-of-Authority? Understanding PoA Consensus Mechanisms

In cryptocurrency, each transaction is verified by the node called the validator and these nodes do this by using a consensus algorithm. Although there is a variety of consensus algorithms such as Proof of Work, Proof of Stake, Byzantine Fault Tolerance, Proof of Identity, Proof of Capacity, and others. All these are consensus used to validate the transaction. Well today, in this article we will discuss a detailed discussion of Proof of Authority (PoA) consensus which is commonly used in the private blockchain network and is responsible for validating transactions. To know more about the PoA read the complete article so, without wasting more time let's get started!

What is Proof-of-Authority? Understanding PoA Consensus Mechanisms  

Proof of Authority - (POA) is a type of consensus algorithm that is used in the blockchain network to validate the transaction. In POA consensus network nodes are chosen based on their reputation, stake, and identity instead of their computational power and the amount they hold. But in some consensus, we prefer the computational power such as in Proof of Work (PoW) as well as we check the amount held by the node by the node in the proof of Stake (PoS) consensus.

In a PoA network, each node is predefined and designated as a validator. Only these nodes have the authority to validate the nodes and if any node will behave maliciously would automatically be discarded from the entire network. This means here you need to perform each task very carefully, in case of a single violation you may be discarded permanently from the entire network and your identity and authority would be lost permanently.

As it is represented by its name, PoA is used by the private blockchain where the authority of the blockchain is in the hands of central authority. In a private blockchain, only the central authority defines the rules of the entire infrastructure, and all the other nodes in the network work according to the predefined rules by the central authority. Unlike other consensus such as PoW and PoS where each node can be part of the network and become the miner or validator, in PoA the validating nodes are predefined by the central authority, and except that node, no other node will become a part of this consensus.

PoA is beneficial in most cases such as fast transactions, lower cost, more security, and scalability as well as it has several advantages such as it being less secure than the public blockchain because it has a very limited node to verify the transaction as well as it works in a centralized network which means here the risk of a single point of failure. Other common disadvantages of this specific consensus are collusion and lack of privacy.


In the final thoughts, Proof of Authority (PoA) Consensus is the type of consensus that is used in the private blockchain network. Its rules are defined by the central authority and the validator nodes are very limited and predefined. Only the predefined nodes designated as the validator are responsible to validate each transaction in the entire network. It has a variety of benefits as well as also comes with several risks as I discussed in the above lesson. In PoA, if a single node acts maliciously would be discarded permanently and would never be allowed to become a part of the network again.

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