# What is Proof of Work

Aug 25, 2022

Proof of work (PoW) describes a system that requires a feasible amount of effort in order to deter silly or malicious uses of computing power, such as sending spam emails or service attacks. The concept is to secure digital money by Hal Finney in 2004 through the idea of “reusable proof of work” using the SHA-256 hashing algorithm.

KEYS

• Proof of work (PoW) is a decentralized consensus mechanism that requires members of a network to expend effort solving an arbitrary mathematical puzzle to prevent anybody from gaming the system.
• Proof of work is used widely in cryptocurrency mining, for validating transactions and mining new tokens.
• Due to proof of work, Bitcoin and other cryptocurrency transactions can be processed peer-to-peer in a secure manner without the need for a trusted third party.
• Proof of work at scale requires huge amounts of energy, which only increases as more miners join the network.
• Proof of Stake (POS) was one of several novel consensus mechanisms created as an alternative to proof of work.

BRIEF

It is the original consensus algorithm in a blockchain network. The algorithm is used to confirm the transaction and creates a new block to the chain. In this algorithm, minors (a group of people) compete against each other to complete the transaction on the network. The process of competing against each other is called mining. As soon as miners successfully create a valid block, he gets rewarded. The most famous application of Proof of Work(PoW) is Bitcoin.

Producing proof of work can be a random process with low probability. In this, a lot of trial and error is required before a valid proof of work is generated. The main working principle of proof of work is a mathematical puzzle which can easily prove the solution. Proof of work can be implemented in a blockchain by the Hashcash proof of work system.

In the below image, you can see that this block is composed of a block number, data field, cryptographic hash associated with it and a nonce. The nonce is responsible for making the block valid.

In the puzzle game, bitcoin software creates a challenge, and there the game begins. This game involves all miners competing against each other to solve the challenges, and this challenge will take approximately 10 minutes to be completed. Every single miner starts trying to find the solution to that one Nonce that will satisfy the hash for the block. At some specific point, one of those miners in the global community with higher speed and great hardware specs will solve the cryptography challenge and be the winner of the game. Now, the rest of the community will start verifying that block which is mined by the winner. If the nonce is correct, it will end up with the new block that will be added to the blockchain. The concept of generating a block provides a clear explanation of proof of work(PoW).

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