Blockchain : Proof Of Work Explained

Deepak Prasad


What is Proof of Work in Blockchain?

  • The method that protects various cryptocurrencies, including Bitcoin and Ethereum, is known as proof-of-work.
  • Proof of work is employed in Bitcoin as the basis for agreement in a permissionless distributed network in which miners compete to add blocks and mint new coin, with each miner's success probability proportionate to their computing effort spent.
  • Proof-of-work is intended to prevent users from generating coins that they did not earn. If users could spend their coins multiple times, then money would basically become worthless. A solution is provided through proof-of-work, which prevents spending twice.

Blockchain : Proof Of Work Explained

  • Satoshi Nakamoto created proof-of-work to help Bitcoin progress successfully.
  •  A proof-of-work system is required to create a timestamp server utilizing a user-to-user protocol. The proof of work is looking for a value that starts with a specific number of zero-valued bits while constructing a hash. The average amount of work required will be exponentially proportional to the number of bits required with a value of zero, but this may be proven by running a single hash.
  • One of the most significant features of the Bitcoin protocol is that each unit is not a file that is delivered like a movie or music. In actuality, what is created is a blockchain record of a change in ownership of a certain number of Bitcoins.
  • The proof of work for this network of timestamps is implemented by raising the value of a block's nonce field until a value is discovered that yields the number of bits with a zero value for the hash of the same.
  • The block cannot be modified without redoing the entire operation after the computational effort to satisfy the proof of work has been completed. Because more blocks are connected after a particular one, updating a block necessitates reworking all subsequent blocks.
  • The proof of work also resolves the issue of how to convey the majority decision. If the majority was based on one vote per IP address, it might be tampered with by someone with access to a large number of IP addresses. "One-CPU-one-vote" is the essence of proof of work.
  • The longest chain, which has proof of work with more effort involved, represents the majority decision. If honest nodes hold the majority of the CPU power, the honest chain will develop quicker and outperform any other rival chain.
  • To change a block in the past, an attacker would have to repeat the block's proof-of-work and all following blocks' proof-of-work, and then reach and pass the nodes' honest work.


Advantages of Proof of Work

  • High level of protection.
  • Provides a decentralized approach for transaction verification.
  • Allows miners to earn cryptocurrency in exchange for their efforts.


Disadvantages of Proof of Work

  • Slow transaction speeds and high fees make it inefficient.
  • High energy consumption.
  • Mining usually necessitates the use of costly machinery.


Some Cryptocurrencies that uses Proof of Work

  • Bitcoin
  • Ethereum
  • Litecoin
  • Monero
  • Bitcoin Cash


How does the Bitcoin network work?

The following are the stages that the network takes:

  • New transactions are received by all nodes.
  • To collect new transactions, each node creates a block.
  • For each block, each node tries to discover a tough proof of work.
  • When a node discovers a proof of work, it sends the block to all other nodes in the network.
  • Nodes accept the block if all transactions are genuine, i.e., only coins that have not yet been spent (transferred by their owner) are transferred.
  • Nodes signal their acceptance of the block by working on the next block in the string, with the previous hash being the hash of the accepted block.

Blockchain : Proof Of Work Explained

The nodes always evaluate the longest string to be accurate and true before attempting to expand it. Some nodes may get one or the other first if two nodes emit distinct copies of the next block at the same time. In that instance, they work on the first branch they get while keeping the other branch in case it becomes longer. The tie is broken when the next proof of work is discovered and a branch gets longer; nodes that were previously working on the other branch are then switched to the longer branch.

It is not necessary for new transaction emissions to reach all nodes.

When they reach a large number of nodes, they will form a block before a considerable period of time has passed. Message loss does not affect the emission of the blocks. If a node does not get a block, it will request one when it receives the next one and discovers that it has been missing.


What is Proof Of Stake? How is it differ from Proof of Work?

Proof of stake is a consensus process that is used to validate bitcoin transactions as an alternative to proof of work. Owners of cryptocurrencies can stake their coins in this system, giving them the ability to review new transaction blocks and add them to the blockchain. Owners of a cryptocurrency can stake coins and construct their own validator nodes using the proof-of-stake approach. Staking is the act of committing your coins to be used for transaction verification. When you stake your coins, they are locked, but you can unstake them if you decide to exchange them.


Advantages of Proof of Stake

  • It consumes less energy.
  • Transactions are processed quickly and at a low cost.
  • Participation does not necessitate the use of any specific equipment.


Disadvantages of Proof of Stake

  • In terms of security, it isn't as reliable as proof of work.
  • Validators with a lot of money can have a lot of power over transaction verification.
  • Some proof-of-stake cryptocurrencies require staked money to be locked up for a set period of time.


Some cryptocurrencies that uses Proof of Stake

  • Cardano
  • Algorand
  • Tezos



Proof-of-work is intended to prevent users from generating coins that they did not earn. If users could spend their coins multiple times, then money would basically become worthless. Proof of stake is a consensus process that is used to validate bitcoin transactions as an alternative to proof of work. Both consensus algorithm has its own advantages and disadvantages.


Further reading

What is Blockchain?
Brief History of Bitcoin
Proof Of work Wikipedia
Proof Of Stake Wikipedia


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Deepak Prasad

He is the founder of GoLinuxCloud and brings over a decade of expertise in Linux, Python, Go, Laravel, DevOps, Kubernetes, Git, Shell scripting, OpenShift, AWS, Networking, and Security. With extensive experience, he excels in various domains, from development to DevOps, Networking, and Security, ensuring robust and efficient solutions for diverse projects. You can reach out to him on his LinkedIn profile or join on Facebook page.

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