Proof of Work

Proof of Work (PoW) is a consensus algorithm where nodes (miners) solve complex cryptographic puzzles to validate transactions and add new blocks to a blockchain.

What is Proof of Work?

Proof of Work is a decentralized consensus mechanism used by blockchains like Bitcoin to secure the network and ensure transaction validity. Miners compete to solve computationally intensive mathematical problems, typically involving finding a nonce that, when hashed with the block’s data, produces a hash meeting specific criteria (e.g., starting with a certain number of zeros). The first miner to solve the puzzle broadcasts the solution, and if validated by other nodes, their block is added to the blockchain, earning them a reward in digital assets (e.g., 3.125 BTC per block as of Bitcoin’s 2024 halving).

This process, called mining, requires significant computational power and energy. For instance, Bitcoin’s network consumes approximately 140 TWh annually as of 2025, equivalent to the energy use of a mid-sized country. PoW’s strength lies in its security, as altering a block requires re-mining all subsequent blocks, which is computationally infeasible. However, it faces criticism for its energy intensity and limited scalability, with Bitcoin processing around 7 transactions per second compared to faster alternatives like Proof of Stake systems.