The Proof of Authority model is based on a limited number of block validators, which makes it a scalable system. Blocks and transactions are checked by pre-approved participants who act as moderators of the system. Consequently, PoA blockchains are protected by validation nodes that are considered to be trustworthy.
We are using a Proof-of-Authority 2 consensus mechanism for the MEHH Coin, in which a pool of known and trusted computers—called validator nodes—are responsible for validating transactions and creating blocks. This approach offers certain security, regulatory transparency,and considerable capacity benefits, though it does sacrifice a small but not insignificant level of decentralisation. By limiting the ability to create blocks to a known pool of validators, we can achieve the following benefits without sacrificing the integrity of the chain:
Reduced transaction costs
The reduced computing and energy requirements, in turn, reduce the operating cost for validators. In combination with the increased throughput, this makes transaction costs lower and more predictable than those on Ethereum.
Minimal network latency
Validator nodes on MEHH blockchain are typically running on dedicated hardware, on a professional server environments with high-speed internet connections.
Simplified ecosystem upgrades
Limiting validator status to known and legally registered entities simplifies the process for rolling out upgrades to the core protocol (coordinating a vetted group of validators with aligned incentives is easier than a dynamic group of anonymous miners).
Improve the efficiency of smart contracts while also forging a more equitable consensus model.
Improved resource efficiency and lower energy consumption
The combination of limiting validator status to a defined number of nodes who have passed a vetting process and establishing economic and reputational incentives (validators have something at stake) introduces an inherent level of trust between the participants. Since there is no competition among validators to race each other to create blocks, transaction throughput can be increased (faster block time) while energy consumption and computational complexity are drastically reduced (compared to Proof-of-Work).
We are aware, as well, of the limitations and risks of adopting a Proof-of-Authority consensus and are adopting the following mitigation strategies. While these are our current hypotheses, MEHH Coin project will continue to test and develop new solutions over the next year.
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