Microsoft unveiled Proof-of-Authority (PoA) which is the new algorithm for Ethereum blockchain on Azure.
Unlike Proof-of-Work (PoW), the PoA does not need computational power if one wants to mine cryptocurrency, as it is meant for innovativeness in which all partakers are trustworthy.
According to a newly published announcement, the PoA algorithm will allow organizations to create applications on any Ethereum network that is notably not secured by the widespread Proof-of-Work (PoW) algorithm.
Software engineer Per Cody Born who works at Azure Global writes that the PoW algorithm is fantastic on a blockchain where the participants don’t trust each other, as it self-controls the network via computation costs. The blog post reads:
This works absolutely fantastic in unidentified, open networks where competition for cryptocurrency endorses security on the network. Though, in private/consortium networks, the underlying has no value. An alternate protocol, Proof-of-Authority (PoA) is more appropriate for permissioned networks in which all consensus partakers are reputable and known.
In Microsoft’s prototype, each of the consensus nodes is going to have its own ETH characteristics, and network partakers will have the ability to give their votes to others in case their key nodes go offline. This way, Born discovered that all of the members of the network would be able to take part in the network.
The announcement further revealed that the PoA comes with an in-built decentralized application (DApp) labeled “Governance DApp,” to “simplify the voting and validator allocation.” It will let each group member manage his or her keys, and also to “allow secure signing in a wallet of one’s liking.”
Thanks to the DApp, the network will now have decentralized governance, as alterations will be directed via on-chain voting, in an auditable and transparent manner. Microsoft further allowed Parity’s web-assembly support, which enables developers to bypass Ethereum’s Solidity dialectal, and author smart contracts in accustomed languages such as Rust and C++.
Based on a report by Investopedia, Microsoft’s PoA algorithm could have several consequences. Per the publication, apps to be developed could comprise employee reimbursement, supply chain lapse, electronic voting, and smart contract-supported agreements.