In a recent update, CEO John Karony discussed the consensus mechanics that will be used in the operation of the SafeMoon Blockchain. He shared this information in a 'captain's log'; check it out below
What is Proof of Authority?
A Proof of Authority (PoA) blockchain is a type of distributed ledger technology that uses a consensus mechanism based on the reputation or identity of the validators, rather than on the computation power used in Proof of Work (PoW) systems or the stake of validators in Proof of Stake (PoS) systems.
In a PoA blockchain, a group of preselected and trusted individuals, known as "authorities," are responsible for validating transactions and creating new blocks. These authorities are usually chosen based on their reputation, expertise, or stake in the network, and they are required to identify themselves using a digital certificate or other forms of verification.
One of the main advantages of PoA systems is their higher transaction speed and lower energy consumption compared to PoW systems, as the validation process does not require significant computational resources. This makes PoA suitable for scenarios where fast transaction processing and low energy consumption are important, such as in supply chain management or governance applications.
Some real-world examples of PoA working include:
Supply chain management: PoA can be used to track the movement of goods and materials through the supply chain, providing a tamper-proof record of the origin, quality, and location of the products.
Identity verification: PoA can be used to verify and authenticate identities, such as in the case of government-issued identity documents or digital certificates.
Governance: PoA can be used to facilitate decision-making and voting processes in decentralized organizations, enabling transparent and secure governance.
Energy trading: PoA can be used to facilitate peer-to-peer energy trading and enable the integration of renewable energy sources into the grid.
Insurance: PoA can be used to automate and streamline the claims process in the insurance industry, enabling faster and more accurate payouts.
Another advantage of PoA systems is the ability to provide a high level of security and trust, as the authorities are known and accountable entities. This makes PoA particularly suitable for private and consortium blockchains, where the network participants are trusted entities that have a shared interest in the network's operation.
To mitigate some risks of PoA systems, PoA uses a dynamic authority model, where the set of authorities can change over time based on certain rules or criteria. For example, the authorities may be rotated regularly to prevent any single entity from gaining too much power, or new authorities may be added to the network based on the reputation or stake of the applicants.
Transactions per second with PoA
Transaction speed, also known as transactions per second (TPS), is an important consideration for any blockchain system, as it determines how quickly the network can process and confirm transactions.
In Proof of Authority (PoA) systems, the transaction speed is generally faster than in Proof of Work (PoW) systems, as the validation process does not require significant computational resources. This is because in PoW systems, miners must compete to solve a complex mathematical puzzle in order to validate transactions and create new blocks, which can be time-consuming and require a lot of computing power. In contrast, in PoA systems, the authorities are responsible for validating transactions and creating new blocks, and they do not need to perform any complex computations.
However, the transaction speed of a PoA system will depend on several factors, including the number and capabilities of the authorities, the size of the blocks, and the complexity of the transactions. Some PoA systems may be able to process hundreds or thousands of transactions per second, while others may be limited to a lower number of TPS.
It is worth noting that transaction speed is not the only factor to consider when evaluating a blockchain system. Other factors, such as security, decentralization, and scalability, may also be important, depending on the specific use case and requirements of the network.
Conclusion
Overall, Proof of Authority is a promising consensus mechanism that offers a balance between security, trust, and performance. It is particularly suitable for private and consortium blockchains, where the network participants are known and trusted entities. It is important, however, to carefully design and implement the authority model and the penalty mechanisms to ensure a fair and secure operation of the network.