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What is Proof of Work in Cryptocurrency — How it works?

You may have heard what is proof of work by now? The proof of work principle, which dates back to 1993, was created to prevent denial of service attacks and other forms of network abuse, such as spam, by requiring some labor from the service user as computer processing time.

Bitcoin pioneered an innovative approach to employing proof of work as a consensus mechanism for validating transactions and broadcasting new blocks to the blockchain in 2009.

Bitcoin pioneered an innovative approach to employing proof of work as a consensus mechanism for validating transactions and broadcasting new blocks to the blockchain in 2009.

How proof-of-work works?

In a nutshell, network miners will compete against one another to solve complicated computational riddles to find the answer to the algorithm.

These riddles are tough to solve, yet the correct solution is simple to check. When a miner discovers the answer to a puzzle, they can broadcast the block to the network, where all other miners can verify that the solution is accurate.

Let’s understand this theory with an example.

Bitcoin is a blockchain-based system that relies on the efforts of decentralized nodes to keep it running. Miners are some of these nodes, and their job is to add new blocks to the network.

Miners must try to predict the nonce (a pseudo-random number) in order to do so. This number must generate a value that matches the above requirements when combined with the data in the block and sent through a hash function.

In a nutshell, a hash with four zeros at the start When a matched result is got, the other nodes validate the outcome’s legitimacy, and the minor node receives a block reward.

As a result, adding a new block to the major chain is impossible without first generating a valid nonce, which creates the solution of a specific block known as Block hash.

Each validated block includes a block hash that symbolizes the miner’s labor.

That’s the reason it’s called Proof of Work.

Why Proof-of-Work (PoW) is important?

Proof of Work aids in the network’s defense against a variety of threats. A successful assault would cause a significant amount of computer power and time to complete the calculations, making it inefficient because the incurred cost would be greater than the potential rewards for attacking the network.

Advantages / Disadvantages?

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Problems that need to solve?

One problem with proof of work is that it necessitates the use of expensive computer gear that uses a lot of energy. This sometimes create shortage of these products in the market, hence could make a notable increase in the price of these products.

And, while intricate algorithm calculations are required to ensure the network’s security, these computations aren’t able to be used for anything else.


While proof of work isn’t the most effective means of establishing consensus in blockchain, it remains one of the most popular.

Alternative methods and approaches are already being used to overcome the challenge, but only time will tell which method will succeed in proof of work.

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Chaitanya Prabuddha

Chaitanya Prabuddha

Web Developer • Content & Technical Writer • Talks about Web Development, Web3 & Blockchain, Developer Tips & Content Creation.

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