Proof of Work (PoW) is a consensus algorithm used in blockchain networks to validate transactions and create new blocks. It requires participants, known as miners, to solve complex mathematical problems using their computational resources. Once a miner successfully solves the problem, they can add the next block to the blockchain and are rewarded with newly minted cryptocurrency coins and transaction fees. PoW serves as a security measure for decentralized networks, making it difficult for any single entity to compromise the integrity of the blockchain. The history of PoW as a concept predates cryptocurrencies, with its origins traced back to the early 1990s when researchers Cynthia Dwork and Moni Naor proposed it as a method to deter spam and denial-of-service attacks. In 2009, Bitcoin’s creator, Satoshi Nakamoto, adopted PoW as the consensus mechanism for the Bitcoin blockchain, recognizing its potential to secure a decentralized network and prevent double-spending. Since then, PoW has become the foundation for many other cryptocurrencies, including Ethereum, Litecoin, and Bitcoin Cash.
Full analysis : The Building Blocks of Trust: Decrypting Proof of Work in the Cryptocurrency World.
