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Proof of authority (PoA) is an algorithm used with blockchains that delivers comparatively fast transactions through a consensus mechanism based on identity as a stake.[ citation needed ] The most notable platforms using PoA are VeChain, [1] Bitgert, [2] Palm Network [3] and Xodex.
In PoA-based networks, transactions and blocks are validated by approved accounts, known as validators. [4] Validators run software allowing them to put transactions in blocks. The process is automated and does not require validators to be constantly monitoring their computers. It, however, does require maintaining the computer (the authority node) uncompromised. The term was coined by Gavin Wood, co-founder of Ethereum and Parity Technologies. [5]
With PoA, individuals earn the right to become validators, so there is an incentive to retain the position that they have gained. By attaching a reputation to identity, validators are incentivized to uphold the transaction process, as they do not wish to have their identities attached to a negative reputation. This is considered more robust than PoS (proof-of-stake) - PoS, while a stake between two parties may be even, it does not take into account each party's total holdings. This means that incentives can be unbalanced. On the other hand, PoA only allows non-consecutive block approval from any one validator, meaning that the risk of serious damage is centralized to the authority node.[ citation needed ]
PoA is suited for both private networks and public networks, like POA Network or Eurus, where trust is distributed.[ citation needed ]
Proof of work (PoW) is a form of cryptographic proof in which one party proves to others that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this expenditure with minimal effort on their part. The concept was invented by Moni Naor and Cynthia Dwork in 1993 as a way to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from a service requester, usually meaning processing time by a computer. The term "proof of work" was first coined and formalized in a 1999 paper by Markus Jakobsson and Ari Juels. The concept was adapted to digital tokens by Hal Finney in 2004 through the idea of "reusable proof of work" using the 160-bit secure hash algorithm 1 (SHA-1).
Double-spending is the unauthorized production and spending of money, either digital or conventional. It represents a monetary design problem: a good money is verifiably scarce, and where a unit of value can be spent more than once, the monetary property of scarcity is challenged. As with counterfeit money, such double-spending leads to inflation by creating a new amount of copied currency that did not previously exist. Like all increasingly abundant resources, this devalues the currency relative to other monetary units or goods and diminishes user trust as well as the circulation and retention of the currency.
Proof-of-stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. This is done to avoid the computational cost of proof-of-work (POW) schemes. The first functioning use of PoS for cryptocurrency was Peercoin in 2012, although the scheme, on the surface, still resembled a POW.
Ethereum is a decentralized blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software.
A blockchain is a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Since each block contains information about the previous block, they effectively form a chain, with each additional block linking to the ones before it. Consequently, blockchain transactions are irreversible in that, once they are recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.
Hyperledger is an umbrella project of open source blockchains and related tools that the Linux Foundation started in December 2015. IBM, Intel, and SAP Ariba have contributed to support the collaborative development of blockchain-based distributed ledgers. It was renamed the Hyperledger Foundation in October 2021.
A decentralised application is an application that can operate autonomously, typically through the use of smart contracts, that run on a decentralized computing, blockchain or other distributed ledger system. Like traditional applications, DApps provide some function or utility to its users. However, unlike traditional applications, DApps operate without human intervention and are not owned by any one entity, rather DApps distribute tokens that represent ownership. These tokens are distributed according to a programmed algorithm to the users of the system, diluting ownership and control of the DApp. Without any one entity controlling the system, the application is therefore decentralised.
A distributed ledger is a system whereby replicated, shared, and synchronized digital data is geographically spread (distributed) across many sites, countries, or institutions. In contrast to a centralized database, a distributed ledger does not require a central administrator, and consequently does not have a single (central) point-of-failure.
Ethereum Classic is a blockchain-based distributed computing platform that offers smart contract (scripting) functionality. It is open source and supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM).
Cardano is a public blockchain platform. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency, ADA.
The Bitcoin scalability problem refers to the limited capability of the Bitcoin network to handle large amounts of transaction data on its platform in a short span of time. It is related to the fact that records in the Bitcoin blockchain are limited in size and frequency.
A cryptocurrency wallet is a device, physical medium, program or an online service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often offers the functionality of encrypting and/or signing information. Signing can for example result in executing a smart contract, a cryptocurrency transaction, identification, or legally signing a 'document'.
Polkadot is a blockchain platform. The native cryptocurrency for the Polkadot blockchain is the DOT.
In blockchain, a fork is defined variously as:
Hashgraph is a distributed ledger technology that has been described as an alternative to blockchains.The hashgraph technology is currently patented, is used by the public ledger Hedera, and there is a grant to implement the patent as a result of the Apache 2.0's Grant of Patent License so long as the implementation conforms to the terms of the Apache license. The native cryptocurrency of the Hedera Hashgraph system is HBAR.
A blockchain is a shared database that records transactions between two parties in an immutable ledger. Blockchain documents and confirms pseudonymous ownership of all transactions in a verifiable and sustainable way. After a transaction is validated and cryptographically verified by other participants or nodes in the network, it is made into a "block" on the blockchain. A block contains information about the time the transaction occurred, previous transactions, and details about the transaction. Once recorded as a block, transactions are ordered chronologically and cannot be altered. This technology rose to popularity after the creation of Bitcoin, the first application of blockchain technology, which has since catalyzed other cryptocurrencies and applications.
Ouroboros is a family of proof-of-stake consensus protocols used in the Cardano and Polkadot blockchains. It can run both permissionless and permissioned blockchains.
Algorand is a proof-of-stake blockchain and cryptocurrency. Algorand's native cryptocurrency is called ALGO.
Proof of identity (PoID) is a consensus protocol for permission-less blockchains, in which each uniquely identified individual receives one equal unit of voting power and associated rewards. The protocol is based on biometric identification, humanity identification parties and additional verification parties.
Polygon is a blockchain platform which aims to create a multi-chain blockchain system compatible with Ethereum. As with Ethereum, it uses a proof-of-stake consensus mechanism for processing transactions on-chain. Polygon's native token is named POL. POL is an ERC-20 token, allowing for compatibility with other Ethereum cryptocurrencies. It is operated by Polygon Labs.
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