Proof-of-authority (PoA) networks are used only when all blockchain participants are known. In proof-of-authority, each participant is known and registered with the blockchain. Such a blockchain is called a permissioned chain, as only computers that are part of this approved list of authorities are able to forge blocks. It is critical, therefore, that none of the authority computers is compromised, and each operator must take pains to ensure the integrity of their validator. This approach was originally shared by Gavin Wood of Parity Technologies as a different way of running an Ethereum-based blockchain.
The three main conditions that must be fulfilled for a validator to be established are as follows:
- Identity needs to be formally verified and on chain.
- Eligibility should be difficult to obtain. Examples are things such as becoming a notary public, submitting to background checks, and posting a bond.
- The set of things that must be required of each authority...