[Ethereum] Proof Of Authority vs Proof Of Work geth

There are different algorithms for Proof of Authority. For instance Parity's Authority Round is essentially round robin, where as Rinkeby's version is more complicated. Proof of Authority is not well defined enough to list specific attacks, pick an implementation.

I think an important thing to keep in mind with Proof of Authority is that since the parties are predetermined and trusted, they probably already know each other. In your example with banks, the banks all are well established and know how to get in touch with each other. This is very different from a public network like Bitcoin or Ethereum, where actors are pseudonymous and can just make new identities on a whim.

In a PoA chain where the authorities all have established identities, it is very possible that penalties could exist outside the blockchain system. In your example with banks, legal contracts could be established between banks to ensure that detectable attacks or collusion between banks is punishable.

It's weird to think that a blockchain would fall back to legal rules, but it's also weird to think of a blockchain that is controlled by a central set of authorities.

The protocol defines a voting mechanism to dynamically add new signers and remove existing ones. In Geth this can be controlled via the clique.propose(address, authorized) method (clique_propose for remote RPC calls).

To authorize a new signer, existing ones can propose it via clique.propose("0x...", true). When more than half the signers proposed it, the authorization comes into effect immediately and the new account can start signing blocks.

Similarly, existing signers can propose deauthorizing existing ones via clique.propose("0x...", false). Again if half + 1 signers deauthorize a signer, it is immediately removed from the list and blocks minted by it are rejected from that point onward.

The protocol defines that the block reward is zero (and similarly there can't be any uncles). The block and uncle rewards are a subsidy for the effort wasted on PoW. Since Clique is based on PoA, there's zero cost to minting a block, so there shouldn't be any "reward" for doing it either.

Running transactions of course may incur a tiny processing time, but the sealer does get the transaction fees in exchange, so that should cover it.

All in all however note, that PoA is meant for more of a collaborative environments where miners don't try to race each other, rather attempt to play together for a common goal of keeping the network ticking.