PoW (Proof-of-Work) is a process that occurs following the validation of a consolidated block after verifying and recording transactions in that block. Miners who form the nodes of the network, act as transaction checkers and are of crucial importance for the survival of the Blockchain. Indeed, without miners, anyone could create a block and say it is validated. In the case of Bitcoin, the blocks are consolidated every 10 minutes and are arranged with the previous block, forming what is called the blockchain. This protocol makes it possible to secure the Bitcoin network and thus avoid the attacks that any entity centralizing its information undergoes. These attacks in question are DDos (denial of service attacks ), aimed at saturating a server to disrupt or corrupt the operations of a website. Decentralization makes it possible to avoid this type of problem, since it is necessary to control at least 51% of the blockchain network in order to be able to control it.
As a reminder, here is how transactions on the blockchain are carried out
A problem arises: the difficulty of mining
Today, the Bitcoin has become so democratic that the number of miners is such that it is no longer possible or at least profitable to mine cryptocurrencies with a computer, as it was the case a few years ago. From now on, competition between miners is fierce and it is necessary to acquire very powerful equipment, given the difficulty of mining, becoming more and more difficult for our machines. As you will have understood, becoming a miner requires a lot of courage but above all some technical knowledge.
How does “POW” work?
As mentioned in the introduction of the article, the protocol is subject to considerable competition where miners are busy solving complex mathematical problems that require high computing power to do so. Computers will test millions of possibilities. Once the calculation is solved, the miners will check several times if the solution solves the mathematical problem. In theory, the miner who has found the solution to the enigma has the right to create the next block and is rewarded. In practice, they will join pools to merge and thus increase tenfold the computing power available for transaction verification. Consequently, these miners will share the reward in proportion to the power they have provided.
The Pow, for or against?
The Pow protocol allows you to take advantage of the Pos (Proof of stake) or other alternatives such as (Proof of Importance, Proof of Activity, Proof of Capacity). But it also has disadvantages, which make one system no better than the other. Here is a list of the advantages and disadvantages of proof of work.
- Security: it is very important because it is necessary to have at least 51% of the network’s computing power to saturate it with false transactions.
- It is not ecological; the difficulty of mining makes the network less and less efficient with the same energy expenditure.
- If the gains are more attractive on another blockchain then miners can migrate and leave the network vulnerable to cyber-attacks. because it will be easier to own 51% of the network’s computing power
- For all cryptocurrencies, the difficulty of mining and the number of rewards distributed decreases over time, having a strong impact on the profitability of miners.
To go further
We advise you to read our article on proof of stake (PoS) which is another method used to create new blocks.
That’s the end of this article about the PoW consensus. I hope you have been interested in it and have a better understanding of the PoW consensus now. Feel free to enjoy and share this article with your friends and family. If you have any questions, please comment and we will answer as soon as possible !
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