Glossary
Proof of work
Proof of work (PoW) is a consensus mechanism in which miners compete to solve a costly computing puzzle; the winner adds the next block to the blockchain and earns a reward, which makes rewriting history very expensive.
Also called PoW, Proof-of-work, Mining, Nakamoto consensus
See also
Proof of work (PoW) is the way Bitcoin and several other blockchains agree on a single history of transactions without a central authority. Computers called miners compete to find a number that, combined with a block’s data, produces a hash below a target value. There is no shortcut: the only method is to try billions of guesses, which costs electricity and hardware.
How proof of work works
A miner gathers pending transactions into a candidate block and repeatedly hashes it (with SHA-256 in Bitcoin’s case), changing a small field called the nonce each time. The first miner to find a valid result broadcasts the block. Other nodes check it instantly, since verifying the answer is easy even though finding it is hard. The winner receives newly created coins plus the fees, a reward cut over time by the Bitcoin halving.
To keep a steady pace of about one block every ten minutes, Bitcoin adjusts the difficulty every 2,016 blocks, roughly every two weeks. If more miners join, puzzles get harder; if miners leave, they get easier.
A concrete example
Suppose an attacker wants to spend the same coins twice by rewriting a block from an hour ago. They would have to redo the work of that block and of every block mined since, and then overtake the rest of the network. On Bitcoin, that would require more computing power than all other miners combined, an enormous cost for an uncertain gain.
Why it matters for users
- Security comes from real-world cost, not from trusting a company.
- Anyone with hardware and power can mine, without asking permission.
- Each confirmation on top of your transaction makes it harder to reverse.
Bitcoin, Litecoin, Dogecoin, Bitcoin Cash and Monero all use proof of work, with different algorithms.
Limits and criticism
Proof of work consumes a lot of electricity, which draws environmental criticism. Mining has concentrated in large farms and pools, and a small PoW chain can be hit by a 51% attack if someone rents enough hashing power. Ethereum left PoW for proof of stake on 15 September 2022, an event known as the Merge, which cut its energy use by about 99.95% according to the Ethereum Foundation.