Crypto glossary
Proof of authority (PoA)
Proof of authority (PoA) is a consensus method where a small set of approved, identified validators produce blocks, trading openness for speed and simplicity.
Under PoA, the right to produce blocks comes from being on an approved list rather than from mining power or staked coins. Validators are known entities, often companies or institutions, whose reputation is what they put at risk. They take turns producing blocks, and misbehaving ones can be voted out by the others.
Because there are few validators and no expensive puzzle to solve, PoA chains are fast, cheap and predictable. The model has been widely used for Ethereum testnets, private and consortium networks, and some public chains that combine it with staking, such as BNB Chain's proof of staked authority. It also suits sidechains run by a single organisation.
The weakness is centralisation. A handful of validators can censor transactions, collude to rewrite recent history or be pressured by regulators, and compromising a few keys can compromise the chain. The Ronin bridge hack in 2022 showed how dangerous a small validator set can be when several keys sit with the same operator.
Example
A company runs an internal PoA network with five validator nodes held by different departments; blocks are produced every few seconds and a misbehaving node can be removed by a vote of the other four.