Glossary

Proof of Work

Plain-language definition Crypto glossary

Key takeaways

Proof of Work is a consensus mechanism in which miners compete to solve a computationally difficult puzzle, and the first to find a valid solution adds the next block and collects the block reward.
Miners repeatedly hash a block's data with a changing nonce until the result falls below a network target, which takes enormous numbers of guesses to find but is instant to verify.
The real electricity and hardware cost of mining is what secures the chain, because rewriting history would require out-computing the honest majority.

Definition

Proof of Work is a consensus mechanism in which participants, called miners, compete to solve a computationally difficult puzzle. The first to find a valid solution earns the right to add the next block of transactions to the blockchain and collects the associated block reward.

How it works

Miners repeatedly hash a block’s data together with a changing value called a nonce until the result falls below a network target. Finding that solution requires enormous numbers of guesses and therefore real electricity and hardware, but verifying a winning solution is instant for everyone else. The network automatically adjusts the difficulty so that blocks arrive at a roughly steady pace regardless of how much mining power is online.

Why it matters

The cost of mining is what secures the chain: to rewrite history an attacker would need to out-compute the honest majority, which is prohibitively expensive on a large network. The same energy cost is also Proof of Work’s main criticism, and it is the reason some networks favour proof of stake instead.

Example

Bitcoin is the best-known Proof of Work network. Litecoin and Bitcoin Cash also use it, each with their own hashing details.

FAQ

Frequently asked questions

Why does Proof of Work use so much electricity?

Finding a valid solution requires miners to make enormous numbers of hash guesses, which consumes real electricity and hardware. That cost is not waste from a security standpoint; it is what makes attacking the chain prohibitively expensive.

How does the network keep block times steady?

The protocol automatically adjusts the difficulty of the puzzle based on how much mining power is online. If more miners join, difficulty rises so blocks still arrive at a roughly steady pace, and it falls if mining power drops.

What stops someone from rewriting the blockchain?

To rewrite history an attacker would have to redo the work and out-compute the honest majority of mining power, which is prohibitively expensive. This economic cost of mining is precisely what secures a Proof of Work chain.