Proof of Work Explained

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What is Proof of Work (PoW)?

The initial concept of Proof of Work was developed in 1993, as a way to prevent denial of service attacks and other service abuse (such as spam on a network). It consisted of requiring some kind of work from the users, usually involving computer processing.

In 2009, Bitcoin introduced an innovative way of using Proof of Work, as a consensus algorithm. In this case, PoW is used to validate transactions that are gathered into blocks, which are linked together to form a blockchain.

Since then, PoW has spread to become a widely used consensus algorithm and is now deployed by many cryptocurrencies.

How does it work?

In short, miners compete against each other in solving complex computational puzzles. These puzzles are difficult to solve, but when solved, the solutions can be quickly verified. So, once a miner finds the solution to a new block, they can broadcast that block to the network. All other miners will then verify that the solution is correct and the block will likely be confirmed.


Bitcoin is a blockchain-based system that is maintained by the collective work of decentralized nodes. Some of these nodes are known as miners and are responsible for adding new blocks into the blockchain. In order to do so, miners need to try and guess a pseudo-random number (aka. nonce). This number, when combined with the data provided in the block and passed through a hash function, must produce a result that matches given conditions, for example, a hash starting with four zeros. When a matching result is found, the other nodes will verify the validity of the outcome and the miner node is rewarded with the block reward.

Therefore, it is impossible to add a new block into the main chain without first finding a valid nonce, which in turn generates the solution of a specific block (called block hash). Each validated block contains a block hash that represents the work done by the miner, this is why it is called Proof of Work.

Proof of Work helps to protect the network against numerous different attacks. A successful attack would require a lot of computational power and a lot of time to do the calculations and therefore it would be inefficient since the cost incurred would be greater than the potential rewards for attacking the network.
One issue with Proof of Work is that mining requires expensive computer hardware that consumes a large amount of power. And although this is what guarantees the security of the network, these mining calculations can't be used beyond that.

While Proof of Work may not be the most efficient solution, it is still one of the most popular methods of reaching consensus in blockchains. There are already alternative methods and approaches trying to solve the problems, but only time will tell what method will be the successor of Proof of Work.

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