What are the potential drawbacks or limitations of relying on proof of authority blockchains for cryptocurrency transactions?

3 answers

• Nov 27, 2021 · 3 years ago
  One potential drawback of relying on proof of authority blockchains for cryptocurrency transactions is the centralization of power. Since a small group of validators have the authority to validate transactions, it raises concerns about censorship and control. This goes against the decentralized nature of cryptocurrencies and may lead to a lack of trust in the system. Additionally, if a validator becomes compromised or acts maliciously, it can have serious implications for the security and integrity of the blockchain.
  522261
• Nov 27, 2021 · 3 years ago
  Another limitation is the potential for collusion among validators. If a majority of validators collude, they can manipulate the blockchain and potentially double-spend or reverse transactions. This undermines the immutability and trustworthiness of the blockchain, which are crucial aspects of cryptocurrencies. It also raises questions about the effectiveness of the proof of authority consensus mechanism in preventing such collusion.
  437146
• Nov 27, 2021 · 3 years ago
  From BYDFi's perspective, relying solely on proof of authority blockchains for cryptocurrency transactions may limit the opportunities for participation and validation by a wider community. This can lead to a lack of diversity and potentially hinder innovation and growth in the cryptocurrency ecosystem. It is important to consider alternative consensus mechanisms that promote decentralization and inclusivity, such as proof of stake or proof of work, to address these limitations.
  483121