POA Network is an open blockchain platform based on Ethereum for the implementation of smart contracts and the creation of decentralized applications. The platform's specific feature is the selected method of network security, based on the Proof-of-Authority (PoA) consensus algorithm.
When using the POA consensus algorithm, the possibility of creating blocks is determined not by computational capacities, as with the POW, and not by the participant's economic stake in the network, as in POS, but by the decision of validators whose authority is meant to guarantee the security of the entire network.
In addition to having expert status and publicity, the validator must have a notary license in force in the United States. In the opinion of the POA Network creators, such a strict approach to choosing validators guarantees their fairness and minimizes the possibility of collusion with the aim of manipulative or fraudulent activities.
It has already been proven that this technology significantly increases the throughput of blockchain networks (to date, new POA units can be generated every 5 seconds) and reduces transaction fees.
A big plus is also the possibility of horizontal scaling of the network as similar networks can connect with one another, significantly increasing their throughput.
The POA Token
Initially, the developers of the platform set a hard cap for the ICO at $25 million; however, upon the recommendations of a number of venture funds and crypto investors, this amount was halved. No bonuses and discounts were offered by the developers, which did not stop them from collecting the claimed $12.5 million on the presale in a record 56 seconds.
Now the POA token is used for transaction fees within the network and paying rewards to validators for verifying transactions. The more projects implemented on the basis of the POA Network platform, the higher the cost of the POA token.
The Proof-of-Authority algorithm is suitable for regulated coins, and it is possible that the POA Network will be in demand in the creation of a number of national cryptocurrencies.
The platform can also be a convenient solution for small companies that want to create their own blockchains with adequate transaction fees and high payment processing speeds.
To date, the POA Network employs 12 pre-selected validators, and 13 decentralized applications were released with their participation. Holders of tokens do not aspire to dump them, placing their POA assets mainly in long-term portfolios.