Understand Features and Attack Vectors of d-POA

Alph Delegated Proof of Authority(d-POA) is another form of Proof of Authority(PoA) consensus mechanism to scale up to Thousands of transactions per second.

Common Terms¶

Proof-of-Authority is a new consensus algorithm where trusted set individuals provide all transaction processing. This trust allows transaction processing speed to improve significantly by skipping the PoW hash computation. A few networks exist but they currently only focus on private networks or do not focus on performance as a goal.

Why d-POA?¶

Proof of Stake consensus mechanism has recently received a lot of air time in the context of blockchain scalability issues. Without going into details about its advantages over Proof of Work, Proof of Stake eliminates the need to spend a huge amount of electric power to validate the blocks. Instead, blockchain participants with the most stake in it are selected by algorithm for the right to validate the blocks. The assumption behind Proof of Stake is the following: those who hold a stake in a network are incentivized to act in its interests. All else equal, the more stake one has, the higher should be his or her interest in preserving the system.

The big vulnerability of such a concept, however, is the fact that the same size stake may be valued differently by different actors. For example, take Ben, an early adopter of the blockchain technology with a massive portfolio of digital assets, and Fafa, a newbie who is just exploring the emerging token economy. Let’s say they both hold the same stake in a hypothetical network, Walleteum, 1,000 EUM each. In isolation, we could assume that Ben and Fafa are equally interested in Elixirium’s success. We cannot be as confident, however, when we take their other holdings into consideration. If 1,000 EUM is only 1% of Ben’s total wealth, while for Fafa it represents nearly 50%, their incentives are tough to compare. Ben might care about Elixirium much less than Fafa does, even though they have the same stake. Consequently, her desire to act in the interest of the network might also not be as strong as Fafa’s.

Is there a way to preserve the staking concept, with scarcity and measurability of stake, while ensuring that all who place that stake value it similarly, regardless of other circumstances? Proof of Authority, an alternative consensus mechanism in which the nodes validating blocks are the ones explicitly allowed to do so, might be an interesting approach to consider. Proof of Authority (DPoA) is a modified form of Proof of Stake (PoS) where instead of stake with the monetary value, a validator’s identity performs the role of stake. In this context, identity means the correspondence between a validator’s personal identification on the platform with officially issued documentation for the same person, i.e. certainty that a validator is exactly who that person represents to be.

We at Alph Network implement DPoA, but we are not the only ones. Kovan and Rinkeby, the two Ethereum testnets, also use PoA as a consensus mechanism. Just like in PoS, in DPoA consensus, identity as a form of stake is also scarce. But unlike PoS, there’s only one identity per person. Unless we dive into criminal affairs or psychological complications, the majority of people only have one true identity.

Scalability Blocks can be propagated through the network much more efficiently. And blocks can be produced more consistently and reliably in a much shorter time frame. Moreover, finality can be reached as soon as ⅔ of the block producer has confirmed a transaction.

1.Network Infrastructure In d-POA users have control over who will provide the infrastructure unlike PoW and PoS, where users have no choice on validators. In d-POA, validators can be thought of as employees of users(nominators) and can be fired for not performing their duties.

2.Self-Funding Through Inflation In d-POA, unlike PoS or PoW where miners getrewards for validating a block, inflation is used to pay block producers as well as to fund the development of platform itself.

Attack Vectors¶

Block Producers Collude The main problem this can cause is a delay in the transaction and double spends. Although these situations are highly unlikely.

Conclusion¶

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.

Alph Delegated Proof of Authority(d-POA) is an elegant, robust and practically proven solution to the scalability issues of Blockchain. Although, d-POA does compromise decentralization in some sense, and it is up to token holders to monitor the health of the system, watch for bad behaviour and decide upon what makes for sufficient decentralization. It still solves the scalability and safety issues in Blockchain. And, all in all if not everywhere d-POA can still be used as a Layer 2 or Layer 3 security while keeping a PoW system as a security base layer. It will help us achieve decentralization, safety as well as scalability which is the most important issue of current blockchain networks.