Proof of Authority
Proof of authority (PoA) is a consensus mechanism in which a pre-approved set of known, identified validators are authorized to produce and validate blocks, with the validators' real-world reputation and legal identity serving as the primary security guarantee rather than computational work or economic stake.
In proof of work and proof of stake, the cost of attacking the network is measured in hardware or staked capital — economic resources that must be acquired and risked. Proof of authority substitutes economic cost with reputational and legal cost. Only validators whose identities have been verified and approved by the network's governing authority may participate in consensus. If a validator misbehaves, their reputation — and potentially their legal standing — is at risk.
PoA was proposed by Ethereum co-founder Gavin Wood and implemented in Parity-based Ethereum testnets including Kovan and Rinkeby, and later in the Görli testnet that became the standard Ethereum testnet prior to the Merge. The Clique PoA algorithm used in Görli defines an authorized signer list and a round-robin block production schedule, with provisions for voting on adding or removing authorized signers.
PoA is predominantly used in permissioned or consortium blockchain environments where the participants are known, identifiable, and subject to contractual agreements. Enterprise use cases — supply chain tracking, inter-bank settlement, healthcare record sharing — frequently use PoA blockchains such as Hyperledger Besu configured in PoA mode, or the BNB Smart Chain which uses a Proof of Staked Authority (PoSA) hybrid.
BNB Smart Chain (formerly Binance Smart Chain) uses a variant where a small set of validators (21 at launch) are elected by BNB token holders but must also be approved and staked, combining elements of DPoS and PoA. This hybrid allows for high throughput but has drawn persistent centralization criticism.
The primary limitation of pure PoA is that it is not permissionless: new validators cannot join without approval from the existing authority. This makes PoA fundamentally unsuitable for fully decentralized public networks but highly efficient for enterprise deployments where regulatory compliance, auditability, and defined participant sets are more important than censorship resistance.