The original concept of Proof of Work was developed in 1993. It is a way of preventing and repelling possible attacks and other abuse of services such as spam on the web. Initially, it was a requirement for some work to be done by users, usually involving computer processing.
In 2009, with the advent of bitcoin, an innovative way of using Proof of Work was introduced, turning the proof into a consensus algorithm. In this case, PoW is used to validate block forming transactions that are linked together to form a blockchain .
Since then, PoW has become widespread on the web to become a widely used consensus algorithm and is now used in many cryptocurrencies.
How does Proof of Work work?
In short, diggers compete against each other in solving complex computing puzzles. These puzzles are difficult to solve, but once they are solved, the results can be quickly verified. So after a digger cryptocurrency resolve the new block, it can broadcast this block in the network. Then all other miners check that the solution is correct and the block is confirmed.
Bitcoin is a blockchain based system that is supported by the collective work of decentralized nodes. Some of these nodes are known as “cryptocurrency diggers” and are responsible for adding new blocks to the blockchain. To do this, these so-called “miners” must try to guess a pseudorandom number, also known as nonce. This number, when combined with the data provided in the block and transmitted via a hash function, should result in a result that matches the set conditions, for example a hash beginning with four zeros. When a matching result is found, the other nodes will check the validity of the result and the digger node receives the block reward.
It is not possible to add a new block to the main chain without first finding a valid nons, which in turn generates the solution of a particular block. This is also called a hash on the block. Each validated block contains a block hash that represents the work done by the miner. This is why it is called Proof of Work.
Proof of work helps protect the network from many different attacks.
A successful attack requires too much computing power and time to perform the calculations. It will therefore be ineffective as the costs incurred will outweigh the potential benefits of attacking the network.
One of the problems with Proof of Work is that cryptocurrency mining requires expensive computer hardware that consumes a lot of energy. And while this guarantees the security of the network, the calculations performed at the extraction site cannot be used for other purposes.
Although Proof of Work may not be the most efficient solution, proof of work is still one of the most popular methods of building consensus in blockchain chains. There are already alternative methods and approaches that are trying to solve the problems in the system, but only time will tell which method can inherit PoW.