cryptocurrencies. The first cryptocurrency Bitcoin (BTC) and many alternative coins use the Proof-of-Work consensus algorithm. To process transactions and create new blocks, miners solve complex cryptographic equations and get paid for it. Proof-of-Work (PoW) ecosystems are pretty well protected from hacker attacks, but unfortunately they have scalability issues. With an increase in the number of users, network bandwidth decreases, and it is not so easy to resolve the issue by attracting more miners. A couple of years after the emergence of bitcoin, blockchain engineers began to think about creating alternative security protocols, and with the growing popularity of digital coins, the problem of scalability became obvious. A Proof-of-Stake (PoS) model was proposed, in which the owners of “thick” wallets took on the role of miners. But the proof of ownership mechanism is also not perfect. Validators spend less energy than miners and process transactions a little faster, but the scalability problems of the PoS ecosystem are not completely solved. At least as effective as the proof of authority does. Navigation through the material: As you probably already guessed, PoA is a network protection mechanism, unlike the already become traditional PoW and PoS. Although it is much closer to proof of ownership than to proof of work, many experts consider the PoA algorithm to be another modification of PoS. Let's see if this is really the case. The PoA consensus algorithm, like PoS, provides for a system of trusted nodes. Validators are involved in checking financial transactions and creating blocks. But in order to become one of the validators of the presence of a certain amount on the balance and, the ability to run a full node will not be enough, the main condition is an impeccable reputation. Of course, each new candidate undergoes full identity verification and is approved for the position by the central authority. And, therefore, there is no smell of decentralization here. But this model is perfect for many businesses and companies. It is unlikely that any of the leaders of business consortia is an adherent of the slogan: "Anarchy is the mother of order," and they are not ready to trust the protection of the system to the first person they meet, even if he made a decent contribution. In the Proof of Authority system, validators, who are called network moderators here, must: Of course, in each specific ecosystem, conditions may be slightly different, but in general everything happens according to the same scenario everywhere. The reviewers must make sure that the new moderator meets all the established requirements and only after completing the review he will begin his duties. I must say that in addition to reputation and the availability of money, you need to prove your professional suitability and the ability to deploy a productive network node. This manic meticulousness guarantees the integrity and reliability of the PoA blockchain and the high speed of financial transactions. The proof of ownership mechanism assumes that every holder who placed a bet and launched a full node can become a validator. This is a PoS algorithm in its classical interpretation, no other options are currently being discussed. However, even if the validator is voted for, his identity remains anonymous, and none of the participants knows his passport details and place of residence. This option is excluded in the proof of authority system. In both systems, trusted nodes place bets, but not all coins are taken from malicious PoS validators. Of course, if the system freezes from a hacker attack and the coin rate falls, then the more of these coins you have, the worse, but in some cases this may not work. True, Ethereum Casper provides for penalties for malicious or negligent acts. In PoA, the moderator will fly out for sabotage without severance pay and, in principle, he can even be brought to justice. On the other hand, having full information about the moderators, competitors can try to find leverage. Both concepts are not ideal, like the whole world around us and to judge what is better and what is worse based on the specific situation. A short list of the advantages and disadvantages of the Proof of Authority technology. Gavin Wood's invention has been successfully implemented in the Microsoft Azure cloud platform. The developers of the UMI network slightly tweaked the PoA algorithm, hiding the identities of some validators and implementing a master node system. The technology has proven its viability and has a fairly wide range of applications. Especially when politicians and bankers of developed countries, following China, begin to transfer traditional money to the blockchain. The development of the cryptoindustry continues and, therefore, in the future we will have a variety of financial instruments