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Consensus Algorithm

Japan Open Chain uses the Proof of Authority (PoA) method for node cooperation. The Japan Open Chain adopts an operational system in which up to 21 socially trusted organizations in Japan serve as validator nodes in order to enhance network reliability.

With the Proof of Authority consensus algorithm, it guarantees "absolute finality," ensuring faster and more secure transactions than the probabilistic finality of PoW or PoS. For instance, the Bank of Japan defines "final settlement" as (1) the received funds not turning into worthless pieces of paper or disappearing later on and (2) executed transactions never being reversed. The financial industry perceives probabilistic finality as something not easily accepted.

Furthermore, PoA is an official algorithm developed by the Ethereum Foundation, similar to PoW, and has a proven track record of successful operation on Ethereum's testnet for many years. It has also been widely utilized in various custom chain-building cases worldwide. Therefore, it is an algorithm you can confidently rely on.