Considering the impact of the bitcoin network worldwide and its numerous use cases as a decentralized network that provides a peer to peer payment system without the traditional middlemen. Well, all these sounds confusing and relatively impossible until the creation of the bitcoin back in 2009.

The creation of a new block and confirmation of bitcoin transactions is carried out transparently by miners in the network itself, they compete against each other to complete transactions on the network and get rewarded for their services. How does this whole underlying infrastructure work and what type of consensus Algorithm powers it? well, we about find out

Proof of Work
is a form of cryptographic zero-knowledge proof in which one party (the prover) proves to others (the verifiers) that a certain amount of computational effort has been expended for some purpose. Verifiers can subsequently confirm this expenditure with minimal effort on their part.

The proof of work mechanism has become very popular since its adoption in the bitcoin network and other top networks like Litecoin and Etherum. This protocol is the core of the bitcoin network, new blocks are created and consensus reached when miners compete and successfully solve a cryptographic puzzle using heavy computation power. Bitcoin has better trustworthiness because it is protected by heavy computation. Bitcoins are mined using the Hashcash proof-of-work function by individual miners and verified by the decentralized nodes in the bitcoin network. The level of difficulty is periodically adjusted to keep the block time around a target time, the reason for this is to retain the credibility and accuracy of the transactions if the problem is too easy it is prone to vulnerabilities, DoS attacks, and spam and the solution also needs to be easily checked, because not all nodes are capable of analyzing if the calculations are correct so, maintaining a substantial level of difficulty is crucial to the network's credibility and security and the nodes do just that.

Transactions that occur in the bitcoin network are stored and recorded in an open-source distributed ledger known as Blockchain. This ledger stores and arranges the transactions into blocks in the network that have to be solved using heavy computing power to confirm and arrange blocks. Confirming block and transactions in the bitcoin network is carried out by miners, the process of validating transactions is referred to as Mining

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How bitcoins POW(proof of work)system operates

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Once the block has been confirmed and the puzzle solved in Block n, the transaction is placed in a new block and considered confirmed, This process repeats for each block creation and transactions confirmed.

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Advantages of the POW consensus algorithm
The POW protocol provides a lot of security and stability to the bitcoin network hand serves as the backbone for running active nodes. They POW protocol also provides benefits like-

• Mining capabilities
  Miners are rewarded for validating transactions using the proof of work protocol. When miners expand their computing powers in solving block puzzles, with the formation of new blocks and puzzle solved, the miners are rewarded with new bitcoins.

• Defense from DoS attacks.
  The proof of work consensus protects the bitcoin network from numerous attacks like Dos attack that aim at dulling the system and with heavy irrelevant loads making it unresponsive to relevant request. To explain this kind of attack better, it like a coffee shop with lots of bystanders at the door, this crowded entrance makes it difficult for the real customers to make there way inside the shop. The PoW alogrithm imposes some limits on actions in the network. They need a lot of efforts to be executed. Efficient attack requires a lot of computational power and a lot of time to do the calculations. Therefore, the attack is possible but kind of useless since the costs are too high.

• The issue of double spending
  The issue of double spending has been around for a very long time in the traditional system, where banks authoises duplicate transactions that are never reversed. On the contrary the proof of work protocol provides immunity to this problem. Whenever a transaction is initaied, miners validate and confirmed these transaction along with their unique timestamp are added to a new block, this process makes it difficult to duplicate the transaction.

Proof of work makes it very difficult to change any aspect of the blockchain, since such an alteration would require re-mining all subsequent blocks. It also makes it difficult for a user or pool of users to monopolize the network's computing power, since the machinery and power required to complete the hash functions are expensive.

Conclusion

The proof of work protocol is one of the best consensus Algorithm in the ecosystem. it makes mining possible,protection from attack and validation of double spending.

The price of Bitcoin (BTC) will be $13,100.85 by 31st October 2020.

This post was made in response to #steemcryptochallenge, Week-5- I Love Bitcoin.

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