Proof-Of-Work In Blockchain


It is critical for a decentralised network like Blockchain to keep all network participants in sync. However, it is unrealistic to expect everyone to agree on anything. Blockchain employs a consensus technique to create governance among all network members. In this post, we'll look at one of the blockchain's most popular and fundamental consensus methods, Proof-of-Work (PoW). Let's start by understanding the consensus method.

What is the Consensus Mechanism?

To reach a decision state that is accepted by all network members is consensus, to put it simply. For instance, a group of friends can agree without any issues to play football. In this case, consent or consensus is needed in order to decide to play football together. "The purpose of a blockchain's consensus mechanism is to allow a group of diverse nodes to distribute the right to update the network or system. However, the update will take place in a safe manner according to a few defined norms among the group of participants."


In the case of Blockchain, it means that at least 51% of network nodes or users must concur on the impending change. The network will be updated with the new modification if it occurs. If not, it mutually rejects the modification.

What is Proof-of-Work (PoW)?

The oldest and most widely used consensus process is called Proof-of-Work (PoW). When Moni Naor and Cynthia Dowrk wrote a paper investigating how algorithms may be used to stop fraud, it gave birth to the notion. Later, in 2008, Satoshi Nakamoto, the creator of Bitcoin who remains unidentified, published a whitepaper titled "Bitcoin: A peer-to-peer E-Cash system," in which he defined the algorithm. PoW is important to the development of Blockchain Technology. A difficult-to-crack verification mechanism is what is intended. The decentralised network operates under the tenet of remaining cooperative yet not trusting anyone. Blockchain is a series of cryptographically protected, linearly connected information-contained blocks that makes up a decentralised network. In order to maintain connectivity, each block carries the hash of the block before it.


Every block also includes a number of other bits of data in the block header, including a date, block height, transaction records, Merkle Root Hash, block hash, previous block hash, difficulty level, and many more. The other part of the section comprises a number of financial transactions whose hashes eventually become the Merkle root. Thus, a blockchain is a collection of transactional building blocks.

Block Mining

A fresh update to the existing system is considered when a new block is added to the chain. Therefore, it needs the consent of network users. Proof-of-Work (PoW), a consensus process, is used to decide whether to add a new block or not. The network only accepts validated transactions. Contrarily, not all blockages are legitimate. In actuality, the majority of suggested blocks are rejected by the network. The Blockchain protocol establishes the Block validity. The "Difficulty" parameter on a Blockchain network, which is controlled by the protocol, alters how challenging mining a block is. When mining, a new block is added. The new blocks in the chain are proposed by miners. They are outsiders who want to extend the network with their block. The value is derived from the labour necessary to construct a legitimate block. According to their part of the computing power used to create a new block, miners get compensated. The miner validates their efforts by mining a valid block. To guarantee that blocks are generated at regular intervals, the difficulty level can alter in blockchains like the Ethereum network and the Bitcoin network.

How does the PoW Algorithm work?

A Proof-of-Work (PoW) consensus mechanism operates in a way that each miner must overcome a certain amount of difficulty to confirm the validity of the block. A block is only deemed "legitimate" if its total hash value is lower than the difficulty hash.

Difficulty Hash > Block Hash

Important transactional data is permanently stored in a block. In order to get the hash below the difficulty barrier, the miners modify the nonce. The nonce is a part of a block that can be changed to satisfy the limits on difficulty level. To understand how it operates, let's look at an example. Amit is a bitcoin miner who wants to publish his block of transactions involving bitcoin (a virtual currency) to the network. But to make his block legitimate. He must first alter the block nonce until the difficulty threshold is reached by the block's hash. Let’s say, Amit’s block Hash: 321de9e0c Difficulty Hash: 001000000 Nonce: 8520 For, this, Block Hash > Difficulty Hash, which is considered invalid. 741de9e0c1 > 001000000

Block 1

Amit will change the nonce until he gets the first 3 digits as zeroes. After continuously changing nonce for hours, he finally got the hash. Amit’s block Hash: 000383ec5 Difficulty Hash: 001000000 Nonce: 6778 Now, the difficulty threshold got achieved. Block Hash < Difficulty Hash.

Block 2

Amit's block will therefore be deemed genuine and put to the blockchain. Amit receives a little amount of bitcoins in exchange for using his computing resources to find the correct hash when mining a block in the bitcoin blockchain. This entire process is based totally on chance. As a result, the miner's task is to alter the nonce value until the block's overall hash falls below the difficulty hash. Miners have additional duties, but that is the subject of another article.

Benefits of PoW

The benefits of the Proof-of-Work (PoW) mechanism are as follows:

  • a challenging answer. Yet, verification is simple.
  •  PoW does not require initial coin staking before mining as an initial consensus process. Starting with 0 coins will result in only positive results.
  •  Compared to other blockchain consensus algorithms, it is simple to implement.
  •  It is resilient to errors. It implies that the blockchain network won't be completely shut down if one component fails.
  •  Give miners a chance to make money by adding a block.
  •  The most dependable, established, and widely used consensus protocol is PoW. 

Limitations of PoW

The following are the disadvantages of the Proof-of-Work (PoW) mechanism:

  • Since only one miner can eventually add its block, a lot of energy is lost.
  • It consumes a lot of resources and energy because it requires powerful computing power.
  • A network attack risk of 51%. To rule the network, the controlling party can have 51% of the shares.
  • Using additional machinery, spreads environmental dangers.
  • Pow requires a lot of time and effort.
  • It required expensive gear.
  • The threat of intrusion-related denial-of-service attacks.

Which digital currencies use PoW?

The digital currencies that are currently using Proof-of-Work (Pow) are listed below:

  • Bitcoin
  • DigiByte
  • Zcash
  • Bitcoin Gold
  • Ethereum Classic
  • EthereumPow
  • Kadena
  • Ravencoin
  • Litecoin
  • Dogecoin
  • Monero
  • Siacoin
  • Bitcoin SV
  • Bitcoin Cash
  • Horizen

Beyond PoW

The fact that miners lack the heavy apparatus needed to conduct such large computations makes it seem unfair to them. The Proof-of-Work (PoW) system requires significant expense and work. As a transaction fee, gas is also necessary. As a result, extensive research is being done to replace this consensus method. Proof-of-Stake (PoS), Proof-of-History (PoH), Proof-of-Authority (PoA), Proof-of-Capacity (PoC), Proof-of-Elapsed-Time (PoET), and many more are examples of alternative algorithms. Also Read: Proof of Stake in Blockchain


Basic concepts of the Consensus Mechanism and Proof-of-Work are covered in the article above (PoW). Additionally, the advantages and limitations of PoW were explored. I hope the article was enjoyable to read.

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