What is Proof of Work

The first application of the concept of the Proof of Work (PoW) algorithm occurred back in 1993. Back then, to avoid DoS attacks, a new computer that was connected to the resource needed to do some small calculations. This task had almost no effect on performance if the computer was actually used to access the site, but it became incredibly lower if it was used for a DoS attack. In 2009, Satoshi Nakamoto, after making a number of improvements to this concept, created the Proof Of Work algorithm, which we know now, and which is successfully used in most existing cryptocurrencies.

The task of the nodes that make up the network is to find a solution for the equation formed by the contents of the block as quickly as possible - the so-called hash. The process of finding a number is called mining, and those who are looking for it are called miners. As soon as one of the nodes finds it, the rest confirm the correctness of the solution, that means, they validate the founded number. As a result, the first person to find a solution gets a reward, and the block he found (mined block) joins the network. By the way, it's where the name of the algorithm comes from - since other nodes must “prove” (validate) the work done by the miner node, which previously found the required number, and after passing through the hash function, it will give out the hash of the new block.

The new block contains information about the previous one, thus they are related. The block will not be possible to simulate, since this requires the participation of 51% of the nodes, which is extremely difficult to implement. The PoW algorithm works according to the logic described above, ensuring the success of mining as well.

However, over time, more power is required to find the solution described above. Accordingly, more powerful devices and more and more electricity is needed. At the same time, a successful and effective alternative to PoW has not been created, therefore, most of the cryptocurrencies use this particular algorithm.

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