Proof of Authority: The latest concept in the Blockchain space
Currently, Blockchain technology requires certain protocols to protect the network from individuals with malicious intent. Two widely used consensus protocols are Proof-of-Work and Proof-of-Stake. Most popular cryptocurrencies like Bitcoin currently use Proof-of-Work, while other currencies like Ethereum are set to switch to Proof-of-Stake in the near future. Now, one of the newest concepts in the Blockchain space is Proof-of-Authority, which is the consensus protocol that is used by the Elysian e-commerce platform. Proof-of-Authority is able to provide better security by addressing some of the flaws in the other two concepts.
For Proof-of-Work, miners compete with each other to solve complex mathematical equations so as to validate new blocks of transactions. The time taken to authenticate and generate blocks is dependent on the difficulty of the mathematical equations. If the problems are too difficult, block generation grinds to a halt and transaction processing time becomes increasingly slower. However, if the problems are too easy, the Blockchain becomes vulnerable to denial of service and spam attacks. Thus, Proof-of-Work is designed to resolve such issues by rewarding miners with coins for their hard work in successfully overcoming the complex puzzles. As a reward for solving the complex problems, miners are rewarded with coins for the energy and effort spent.
You may wonder, is Proof-of-Work completely devoid of issues? Not exactly. There are two main flaws within Proof-of-Work that undermine its effectiveness as a consensus protocol.
The first flaw is that any attacker with 51% of the mining power would be able to control the network. The attacker would have the ability to block new transactions from being validated and halt payments between users. In addition, they would also be able to reverse ongoing transactions which would allow them to double-spend coins.
The second flaw is that mining uses intensive computational power which requires highly specialized computer hardware. The hardware uses massive amounts of electricity which results in a problem of wastage and environmental unsustainability.
One way in which these flaws can be mitigated is through the Proof-of-Stake system. In this system, mining power is no longer determined by computational power. Instead, mining power is now established by the number of coins an individual currently holds. The more cryptocurrency a person holds, the greater the number of transactions he or she can mine. In Ethereum, a person can deposit a small amount of Ether into a smart contract in order to validate it and the validator receives rewards from the contract over time. If the validator is deemed to be malicious, the network locks the staked ether away. This solves both of the flaws that are prevalent in Proof-of-Work. The 51% attack is prevented as mining power is no longer dependent on computational power, and excessive electrical consumption will not occur due to the removal of hardware mining.
However, the Proof-of-Stake system is not flawless, as anybody in the network can become a validator by simply staking their coins in the contract. This means that now the wealthiest people in the network have the most mining power and they may not have the best intentions. Hence, this still represents a flaw in the level of security of the network.
A new concept that can address these pitfalls is known as the Proof-of-Authority, which is the consensus protocol used on the Elysian Platform. Elysian is a platform that integrates Blockchain technology with e-commerce to provide users with an optimal level of customer experience and security. With Proof-of-Authority, instead of pegging mining power to the number of coins owned, Elysian authorises specific nodes to have this capability. These nodes are known as “sealers”. Any new node that wishes to be added has to be approved by the current authority nodes. Thus, Elysian has the ability to control the nodes that have mining power on its network. Ultimately, by using Proof-of-Authority, Elysian is able to maintain a private Blockchain to securely store user data within its massive ecosystem. User data is encrypted to the private key of each user and distributed across the network, ensuring that there is no single point of vulnerability for attackers to exploit. This allows Elysian to provide the best possible level of security for the users on the platform, giving them a peace of mind.
Find out more about Elysian at:
Website: https://elycoin.io/
Whitepaper: https://elycoin.io/whitepaper/english
Telegram: https://t.me/elysian_ely
Facebook: https://www.facebook.com/ElysianxELY
LinkedIn: https://www.linkedin.com/company/elysian-ely
