What is Proof of Work?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
Proof of Work grants the right to produce a block to whoever can prove they performed a large amount of computation. Rewriting the ledger would mean redoing all that work, which makes tampering economically irrational. It is the mechanism Bitcoin introduced.
Key points
- The chain with the most work behind it wins
- Answers are hard to find but instant to verify
- Rewriting requires a majority of the hashrate
- Its energy use is the main criticism levelled at it
Definition
A consensus algorithm in which the right to append a block is earned by demonstrating the result of costly hash computation.
A distributed network needs a rule for whose record counts. Proof of Work settles it with 'the chain carrying the most cumulative work wins'. Participants brute-force a hash meeting a difficulty condition and attach the evidence to their block.
The strength of this design is that rewriting history means redoing every subsequent block faster than everyone else combined. That requires a majority of the network's computing power, and assembling that much hardware generally costs more than mining honestly would earn.
The trade-off is energy: security is purchased with computation. That was one reason Ethereum moved to Proof of Stake in 2022. Which model is better is not a settled question — PoW anchors security in an external resource, PoS in the asset itself, and the attacks each defends against differ.
Watch out for
- · Small chains have been attacked cheaply by parties renting a majority of hashrate
- · A freshly included block can still be reorganised out; wait for confirmations