Microsoft Innovating Blockchain as Proof of Authority Added on Azure

Microsoft has successfully replaced the proof of work (PoW) algorithm with proof of authority (PoA) on Azure. Besides increasing the efficiency, there were several reasons to deploy PoA to ensure that users can build applications on Ethereum blockchain.

Firstly, according to the Azure Global software engineer, Cody Born, PoA is much more suitable for networks where competition is not required for transactions and users do not trust each other. Besides this,he added on a blockchain consortium, mining process is also excluded, making PoA more suitable than PoW algorithm. He was delighted to introduce new algorithm and explained its feasibility. He said:

.. in private/consortium networks the underlying ether has no value. An alternative protocol, Proof-of-Authority, is more suitable for permissioned networks where all consensus participants are known and reputable. Without the need for mining, Proof-of-Authority is more efficient while still retaining Byzantine fault tolerance.

The latest Ethereum product on Azure offers an identity leasing system which serves to make sure that each node on the network has its own identity and this identity is unique. So, basically two nodes do not have same identity even in the case of virtual machine (VM) or outage; where nodes quickly spin up and resume previous nodes’ identity. Cody Born explained the idea behind this setup and its importance. He said:

We’ve built this solution with the same principles that we drive in all our production services at Microsoft….In the case that a node goes down, it’s important that the member doesn’t lose consensus participation. Ideally, each member would run redundant consensus nodes to ensure a highly available network presence.

Apart from leasing systems, parity’s web assembly support is also enabled on Azure. With addition of this feature, smart contracts, needed to control the transfers of digital currency, are made very easy for the users. Now, developers can use languages such as C, C++, and Rust, rather existing Solidity programming language, to code smart contract. Hence, developers are at ease to build smart contracts now.

Furthermore, Azure monitor feature will allow developers to track node and network statistics and take necessary steps if needed. Cody Born explained the benefits of visibility provided by blockchain by allowing tracking of block statistics. He added:

Network operators can use Azure Monitor to quickly detect and prevent network outages through infrastructure statistics and queryable logs.

Moreover, Governance DApp feature is also included to provide comfort to the users. The first promising consequence of introducing this feature is to allow user to have control over their own keys so they can securely sign wallet of their preference now i.e MetaMask in-browser wallet or Azure Key Vault with ECC signing. The app enables the users who are interested in taking role in a consortium and not in network operations by separating consortium governance from network operation. With DApp, authorities can validate nodes in setup, record changes that occur on blockchain and manage changes through voting. A level of abstraction is also provided that helps programmers to hide all the irrelevant data of object, thus reducing the complexity.

Microsoft Azure started its working on providing a user friendly environment for people who were keen in implementing blockchain applications a long time ago. They realized the importance of doing so in the initial phase of implementing PoA as quite evident from the statement by Principal Program Manager, Marley Gray. He said:

Providing a Blockchain platform in Azure is tremendously valuable for customers who are innovating with different Blockchain technologies and greatly appreciate a fail fast and cheap ecosystem to mix and match technologies in a Dev-Test sandbox. Customers evaluate different implementations, performance test and build prototypes much faster with Azure’s one-click deployment of Blockchain technology approach.

He also stated with reasoning the selection of Ethereum over all other cryptocurrencies, even the top one i.e Bitcoin, on another occasion. At the moment, Microsoft is working with Hyperledger, the United Nations and R3 to study more aspects of blockchain technology and innovate like it has been impacting people’s lives with the launch of PoA on Azure.

Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.