·      For most of the cryptocurrencies in use today, proof of work consensus is the preferred method. The transaction is validated by the algorithm, which also adds a new block to the blockchain.

·      The idea for Proof of Work(PoW) was first published in 1993 by Cynthia Dwork and Moni Naor and was later applied by Satoshi Nakamoto in the Bitcoin paper in 2008. The term “proof of work” was first used by Markus Jakobsson and Ari Juels in a publication in 1999.

·      Cryptocurrencies like Litecoin, and Bitcoin are currently using PoW. Ethereum was using PoW mechanism, but now shifted to Proof of Stake(PoS).

·      In a scenario in which nodes lack mutual trust, the goal of a consensus mechanism is to get all of the nodes to agree, or to trust, one another.

·      Following the validation of each transaction in the new block, it is appended to the blockchain.

·      The block with the longest block height will be added to the chain.

·      In order to add the block to the network, miners must compute their way through a challenging mathematical problem; this process is known as proof-of-work.

·      With time, the mathematical problem becomes more complex.

CHALLENGES WITH POW

·      The 51% risk: A controlling entity can corrupt the blockchain by controlling the majority of the network if it owns 51% or more of the nodes in the network.

·      Time-consuming: In order to solve the puzzle that needs to be solved in order to mine the block, miners must examine a large number of nonce values. This takes time.

·      Resource consumption: In order to solve the challenging mathematical puzzle, miners need a lot of processing power. Precious resources are wasted as a result (money, energy, space, hardware). By the end of 2028, it is anticipated that 0.3% of the world's electricity will be used for transaction verification.

·      Not a quick transaction: It takes ten to sixty minutes to confirm a transaction. Because it takes time to mine a transaction and put it to the blockchain, committing it, it is not a transaction that happens instantly.

PROOF OF WORK(POW)

Key features and principles of Proof of Work:

·      Computational Puzzle: In order to participate in Proof of Work (PoW), miners must solve a mathematical puzzle that needs a lot of computing power. In order to find a hash that satisfies particular requirements, like being below a target number, the block's data must be repeatedly hashed with a nonce, or random value. Finding the proper nonce requires miners to expend computer power and energy, making it a resource-intensive procedure.

·      Difficulty Adjustment: To maintain a steady block generation rate, the computational puzzle's difficulty is dynamically changed in Proof of Work (PoW). The goal of the network is to keep the block generation time of Bitcoin, which is set at once at every 10 minutes. The challenge gets harder if blocks are mined too quickly because of the increased difficulty. Conversely, the difficulty lowers if blocks are mined too slowly.

·      Proof of Valid Work: A miner broadcasts the block to the network after they have determined the proper nonce, which is a valid solution to the puzzle. If more players independently confirm the hash and the puzzle conditions, they can simply confirm the correctness of the answer. This proof shows that the miner has made the necessary computer effort to protect the network.

·      Security & Resistance to Attacks: Because it takes a lot of computing power to change the blockchain's past, proof of work (PoW) is renowned for its security. If a block is changed, all subsequent blocks' computational work would need to be redone as well, which is harder as the chain gets longer. PoW is protected against attacks by this feature, which also offers a high degree of assurance against data manipulation and double-spending.

·      Mining payouts: In PoW-based networks, mining payouts serve as a motivator for miners. A miner is rewarded with freshly created bitcoin when they are able to mine a new block. This payment is the main means of putting new coins into circulation and encourages miners to devote resources to securing the network.