What is Proof of Work (PoW) ?

At its core, Proof of Work is a consensus mechanism used byblockchains⇗to validate transactions and secure the network.
Unlike Proof of Stake (PoS)⇗, which relies on validators staking cryptocurrency as collateral, Proof of Work requires miners to use powerful computers to solve complex mathematical puzzles.
This system is highly secure and has been used successfully by blockchains like Bitcoin⇗ and the original Ethereum, but it comes with high energy consumption and hardware requirements.

Key Features of Proof of Work

Here are the most important aspects of a Proof of Work system:

1. Mining:
Miners compete to solve cryptographic puzzles, and the first to solve it gets to add the next block.

2. Security:
The puzzles are computationally expensive, making it extremely difficult for attackers to manipulate the blockchain.

3. Rewards:
Miners receive block rewards (newly minted coins) and transaction fees as compensation for their work.

4. Energy Consumption:
Proof of Work requires large amounts of electricity, which raises environmental concerns.

5. Decentralization:
While anyone can become a miner, in practice mining often concentrates in areas with cheap electricity or access to specialized hardware.

But how does Proof of Work really work ?

Proof of Work blockchains rely on miners to add new blocks.

Each block is added through the following process:
- Miners collect transactions into a block.
- They compete to solve a mathematical puzzle (hashing).
- The first miner to solve it broadcasts the solution to the network.
- Other nodes verify the solution.
- Once approved, the block is added to the chain, and the miner earns rewards.

Because attacking the network would require controlling more than 50% of the total computing power, it becomes computationally impractical for most attackers.

Practical Applications

How can Proof of Work be useful?

Here are some examples:
- Bitcoin: The first and most well-known blockchain, entirely based on Proof of Work.
- Litecoin: A faster and lighter alternative to Bitcoin, also based on PoW.
- Monero: Uses PoW to provide privacy-focused and censorship-resistant transactions.
- Dogecoin: Originally a meme coin, but still runs on PoW and has an active mining community.
- Legacy Ethereum: Before transitioning to Proof of Stake (Ethereum 2.0), Ethereum relied on PoW for its consensus.

In short

Proof of Work is a battle-tested, secure way to protect blockchains, but it is slower and more energy-intensive compared to Proof of Stake.