How Does the Miner’s Revenue Stream in PoA Compare to That in Pure PoW?
In pure PoW, the miner receives the entire block reward (new coins + transaction fees) for successfully mining the block. In PoA, the miner receives only a fraction of the block reward for finding the blank block header.
While the PoA miner's revenue per block is lower, the overall security cost is shared, which can lead to a more stable, albeit smaller, revenue stream compared to the winner-take-all nature of pure PoW.
Glossar
Revenue per Block
Revenue ⎊ Revenue per Block is the fundamental financial metric for a cryptocurrency mining operation, representing the total value earned for successfully solving the cryptographic puzzle and appending a new block to the chain.
PoA
Mechanism ⎊ Proof of Authority (PoA) is a consensus mechanism where transactions are validated by a limited number of pre-approved, trusted validators rather than through competitive mining.
Revenue Stream
Composition ⎊ The Revenue Stream for a cryptocurrency mining operation is composed of two primary elements: the newly minted block reward, representing the protocol's subsidy, and the accumulated transaction fees from the confirmed block.
Block Reward
Incentive ⎊ A block reward serves as the primary economic incentive for miners or validators to participate in securing a blockchain network.
Miner's Revenue
Income ⎊ Miner's revenue represents the total financial compensation earned by cryptocurrency miners for their contribution to network security and transaction validation.