Understanding Proof Of Authority Consensus Algorithm Training Ppt

Slide 1

This slide provides information regarding the reputation-based consensus algorithm, Proof of Authority. It also includes details of multiple blockchains such as Hyperledger Basu, VeChain, and Eurus that use the PoA consensus mechanism.

Slide 2

This slide provides details regarding the working of the PoA consensus algorithm. It also includes information about the multiple conditions that must be fulfilled to ensure the effectiveness of the Proof of Authority consensus mechanism in the blockchain.

Instructor’s Notes:

The conditions that must be set up to ensure the effectiveness of PoA:

• Formal Identity Evaluation: There should be a robust process with appropriate checks to verify the identity of validators
• Robust Eligibility for Staking Identity: There must be stringent conditions to become a validator. The authority must be perceived as having been earned, valued and unpleasant to lose
• Standard Process for Equal Footing: The process of establishing the validators' authority needs to be the same for all so that everyone is on an equal footing

Slide 3

This slide lists the multiple advantages and disadvantages of the PoA consensus mechanism. The major benefits of the Proof of Authority algorithm are high security, high transaction rate, and significant limitations are centralization, validator's identity.

Instructor’s Notes:

The major advantages of the Proof of Authority consensus mechanism are:

• High Transaction Rate: PoA offers a high transaction rate as the consensus of only selected validators are required to approve the transaction
• High Security: In PoA, since validators’ reputation is at stake, they behave to ensure the integrity of the blockchain network
• High Scalability: As only a limited number of validators are required, it makes PoA a highly scalable consensus algorithm

The major disadvantages of the Proof of Authority consensus mechanism suffers are as follows:

• Validators' Identity's are Visible: Since the validators' identity is public, it makes them prone to third-party manipulations
• Centralization: The PoA is a centralized model and is against the principles of decentralization, which is crucial to the blockchain
• Censorship: PoA is subjected to criticism as it facilitates censorship and blacklisting of many users