Proof-of-Authority (PoA) is a consensus mechanism used in blockchain networks where participants are identified, known, and auditable. Unlike the Proof-of-Work mechanism that relies on computational power and Proof-of-Stake that depends on the amount of cryptocurrency held by a participant, PoA relies on a pre-selected group of validators or nodes who are responsible for creating and validating new blocks. These validators are usually known, trustworthy, and can be held accountable for their actions, making PoA a more centralized form of consensus mechanism compared to others.
PoA is commonly used in private or permissioned blockchain networks where the identity of network participants can be verified, and a high level of trust is required among the users. PoA is also faster and more energy-efficient than PoW since there is no need for the validators to compete for solving complex mathematical problems or consume large amounts of energy in the process.
