Proof of Activity

Proof of Activity is a consensus algorithm used in cryptocurrency networks.

Cryptocurrency is based on the blockchain network. The events on blockchains should be done according to majority accepted agreements. On the other hand, the procedures should proceed under trust and consensuses. Therefore, the entire network should work on a common agreement. It is a head point of driving the network with continuous success. For this purpose, consensus algorithms are used in cryptocurrency networks. In this discussion, we discuss such a consensus algorithm known as Proof of Activity (PoA).

What is Proof of Activity?

PoA is not built as a single algorithm. It is a combination of two consensus algorithms that are in action on blockchain networks. However, PoA is a combination of proof-of-Work (PoW) and Proof-of-Stake (PoS) algorithms. Considering this combination, PoA becomes more sophisticated in terms of performance. It holds a switching mechanism in between both PoW and PoS. For instant, if mining initiates under PoW, the remaining processes are done under PoS systems; The algorithm is switched.

Features of PoA?

PoW is the consensus algorithm of the first and most popular cryptocurrency; Bitcoin. According to the PoW algorithm, the mining difficulty level is increased with respect to the age of the network. This is set as a feature in order to protect the network from been hacked. As the difficulty level is sequentially increasing the energy consumption for mining increases. However, this ends as high-cost activities. According to the PoW algorithm, the miners can mine/validate coins according to the contribution on the blockchain that they have given already. However, PoS appeared as a better option for this energy and cost consumption.

In PoS systems, the miners can mine coins according to the number of coins that there already own. Therefore, the miners who have earn more coins are able of mining more. This creates a certain limit on high energy consumption. But the spending amount faces a reduction in this case. Both these systems are 51% attack preventive. Therefore, the PoA system also holds a similar amount of prevention and it helps to keep the network under a control.

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