Clear DefinitionsProof-of-Work
1 min read
Pronunciation
[proof uhv wurk]
Analogy
Imagine a competition where many people are trying to solve a very difficult Sudoku puzzle. The puzzle is hard to solve but easy to check if a solution is correct. The first person to solve the Sudoku (perform the work) gets to announce their solution (add a block to the blockchain) and receives a prize (block reward). This work makes it expensive and difficult for anyone to cheat the system.
Definition
A consensus mechanism that requires participants (miners) to perform a significant amount of computational work to validate transactions and create new blocks in a blockchain. The first miner to solve a complex mathematical puzzle gets to add the block and is rewarded.
Key Points Intro
PoW is the original blockchain consensus mechanism, known for its security and decentralization but also its high energy consumption.
Key Points
Requires miners to expend computational power (hashrate) to solve cryptographic puzzles.
The first miner to find a valid solution proposes the next block and earns rewards (newly minted coins and transaction fees).
Makes it economically infeasible for malicious actors to attack the network unless they control a majority of the network's hashing power (51% attack).
Used by Bitcoin and was historically used by Ethereum.
Example
Technical Deep Dive
In PoW, miners try to find a nonce such that the cryptographic hash (e.g., SHA-256) of the block header (which includes the nonce, Merkle root of transactions, previous block hash, etc.) is less than a target value set by the network's difficulty. The difficulty adjusts periodically to ensure blocks are produced at a roughly constant rate, regardless of changes in total network hashrate. This 'work' is hard to do but easy for other nodes to verify.
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