Blockchain Glossary

Proof of Authority (PoA)

Proof of Authority (PoA) is a reputation-based consensus algorithm that leverages the value of identity and reputation of block validators which means that block validators are not staking coins but their own reputation, instead.

The term “Proof-of-authority” was first proposed and put into use by Gavin Wood, co-founder of Ethereum and Parity Technologies.

Here are the key take aways from the Whitepaper

How Does It Work?

  1. PoA consensus is based on an extensible group of independent validators and each of them NEEDS to have a verifiable license to be authorized as a validator by the Master of Ceremony. (“authority” comes from them being thoroughly inspected before being accepted as validators, having to satisfy all of the stringent requirements.)
  2. During the initiation ceremony, the MoC invites this set of trusted entities to participate in the network by sending an initial key known to the network via a tamper-proof secure channel.
  3. Validators start to create blocks and generate a reward for the network security. When a validator creates a block, it is rewarded(Not in all cases. Rewarding mechanisms may be different for different use cases.) with a coin and all transaction fees.

So WHAT are the Pros of a PoA;

  • Since it relies on a limited number of block validators, it is highly scalable and transaction time is faster.
  • Having said that, in both cases, POW and POS, those who are the most resourceful win the right to write or to mine the block, to write the history whereas, in PoA all of the *verified validators have an equal chance and take turns to validate the blocks.

The Cons of a PoA network?

  • It foregoes decentralisation, It in simple words, is just an effort to make centralised systems more efficient.
  • PoA is also highly prone to censorship and blacklisting.
  • Reputation doesn’t systematically prevent malicious behaviour, the size of the gains, that can be gathered with a reputation-destroying event can be more valuable than the reputation in community.


  • All consensus mechanisms DON’T have the same rewarding mechanism. Deciding who validates the block is the only thing that remains constant. Eg:- There are PoS implementations that not only reward with transaction fees but with the token rewards as well.
  • Each validator in a Proof Of Authority(PoA) consensus protocol has equal rights to create a block.