OAuth, which is pronounced "oh-auth," allows an end user's account information to be used by third-party services, such as Facebook, without exposing the user's password. OAuth acts as an intermediary on behalf of the end user, providing the service with an access token that authorizes specific account information to be shared. The process for obtaining the token is called a flow.
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OAuth, which was first released in 2007, was conceived as an authentication method for the Twitter application program interface (API). In 2010, The IETF OAuth Working Group published OAuth 2.0. Like the original OAuth, OAuth 2.0 provides users with the ability to grant third-party access to web resources without sharing a password. Updated features available in OAuth 2.0 include new flows, simplified signatures and short-lived tokens with long-lived authorizations.
David Rice explains how OAuth works.