A number of validation machines are also given the responsibility of generating block transactions. These can be accepted into the ecosystem either through votes from the block generators or without verification and this differs from blockchain to blockchain.
How is Proof of Authority different from Proof of Work or Proof of Stake?
The Proof of Authority system is rather different from the Proof of Work or Proof of Stake system in that it does not make use of a mining system as there is no competition between the various actors. This also means that the mechanism that runs on the blockchain uses very little electricity and because there will be very few actors on the blockchain, it can be updated more regularly and with lower fees.
Proof of Authority Implementation and Scalability
It should also be noted that there is no requirement for a native token for the blockchain. This has made the use of Proof of Authority system rather popular for private blockchains such as the one used by JP Morgan.
In terms of scalability and cost reduction, the Proof of Authority system is perhaps the best option but it does have the issue of the power in the blockchain being concentrated among a few chosen people rather than a larger and more diverse number of people.
The Proof of Authority system essentially means that the blockchain is a lot more centralized than with the traditional blockchain systems and though it offers certain benefits such as reduced costs and increased scalability, it is probably not the best option for all situations. The Proof of Authority system is another example of the diverse nature of blockchain systems.
