What is proof of authority?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
Proof of authority is a consensus method in which only a small, pre-identified set of parties may produce blocks. It needs neither computing power nor staked assets, and it runs fast and predictably. The cost is that the power to decide who may produce blocks sits with a specific operator.
Key points
- Only identified authorities may produce blocks
- Requires neither hash power nor staked assets
- Fast, but authority selection is centralised
- Common in enterprise chains and test networks
Definition
A consensus method in which only permitted, known validators may produce blocks. Trust rests on those validators' identity and reputation rather than on computation or staked value.
Proof of work uses computation as the cost of misbehaviour, proof of stake uses pledged assets. Proof of authority uses neither: the collateral is the validator's identity itself, on the premise that a known party can be held accountable.
Validators take turns producing blocks or are selected by a fixed rule. With few, identified participants, agreement is quick and block intervals are steady, and the chain can run with zero or negligible fees.
Typical uses are consortium chains between companies, development and test networks, and certain sidechains of public networks. As a foundation for a network where the public entrusts value, the concentration of authority is an inherent limitation.
Watch out for
- · Whoever appoints the validators is structurally able to censor or reverse transactions
- · The claim that 'a blockchain cannot be tampered with' does not hold under this model
- · When the validator set is undisclosed, users cannot see whom they are actually trusting