What is Proof of Work?

BeginnerNov 21, 2022
What is PoW? What is mining? Which blockchains use the PoW? Pros and cons of PoW.
What is Proof of Work?

What is Proof of Work

PoW (Proof of Work) is one of the most basic consensus mechanisms in the blockchain space. Early blockchain projects such as Bitcoin, Ethereum and Litecoin used the PoW to ensure the consistency and tamper resistant nature of the blockchain.

A simple explanation of PoW is that all network nodes scramble to answer the same mathematical question. Whoever figures it out first will be able to record transactions and get corresponding payoff (new cryptocurrency issued by the blockchain).

In 1993, two cryptography pioneers, Cynthia Dwork and Moni Naor, first proposed the PoW in a paper. In 2008, Satoshi Nakamoto selected PoW as the consensus mechanism for Bitcoin. As the price of Bitcoin rocketed, the power of PoW was gradually seen by the world. Today, PoW has become one of the mainstream consensus mechanisms.

On August 7, 2010, Satoshi Nakamoto posted on the Bitcoin Talk forum that “Proof-of-work has the nice property that it can be relayed through untrusted middlemen.” Proof of Work requires a lot of energy, which in turn gives the blockchain a strong ability to resist attacks. So it’s extremely costly to tamper with blockchains under PoW.

How does PoW work?

In order to reach consensus on transactions within a certain period of time, PoW requires nodes to participate in a race for accounting. In proof-of-work, the so-called “work” is actually mathematical computation, in which computing power (hash rate) plays a decisive role.

The only way to solve the problem in PoW is to build up computing power, trying again and again to eventually find the only correct answer. Once the right result is reached, it can be easily verified by all nodes through broadcasting. Then the transactions on this block will be verified by the entire network. Finally, the network moves on to the next round of competition. This whole process is called “mining”.

Although only one node can get the rewards in each round of competition, every round is independent from each other, so the battle for recording transactions is actually a war about computing power. The higher the hash rate controlled by a node, the more rewards it will receive. The more the number of nodes, and the more energy consumed by the whole network, the more secure the blockchain will be.

PoW is clearly designed and Bitcoin using PoW is theoretically the most decentralized cryptocurrency. Without it, a trustless Bitcoin network would never work.

Pros of PoW:

  1. Simple, reliable, and easy to implement.
  2. Highly decentralized. No central authority required. Nodes can freely enter and exit the blockchain.
  3. The theoretical cost of attacking is very high, which makes a PoW blockchain secure and reliable. An attacker in a plan to tamper with the information on the blockchain has to control more than half of the computing power of the entire network (51% of the hash rate).

Cons of Pow:

  1. Energy intensive.

Relying merely on computing competition makes PoW energy intensive.

As the Bitcoin network’s hash rate grows, mining’s energy consumption has become a global concern. The Cambridge Center for Alternative Finance estimates that as of May 10, 2021, the global annual power consumption for bitcoin mining reached 149.37 TWh. When comparing this number to countries, Bitcoin consumes more energy than 100 countries such as Malaysia and Ukraine, and is almost the same as Vietnam, which is ranked 25th.

In addition, a large portion of the power consumed by Bitcoin is from non-renewable energy sources such as coal, which has led to environmental concern. As a result, several countries, including China, have fully banned bitcoin mining.

  1. Inefficient

With PoW, transactions on the Bitcoin blockchain take a long time to confirm, and throughput on the network is very low.

Due to the difficulty set by PoW, the bitcoin block time is around 10 minutes, which means that it takes up to an hour (after about 6 blocks) for a transaction to be actually confirmed. The TPS of the Bitcoin network is about 7, meaning that only 7 transactions can be processed per second.

  1. Equipment requirement and centralization

While personal CPUs were the most common mining equipment in the early days of Bitcoin, as Bitcoin prices rose, competition for computing power intensified. High-performance graphics cards and even dedicated ASIC miners became the mainstream of mining. As the equipment threshold for mining gets higher, professional mining pools controlled most of the hash rate, which ran counter to the original intent of decentralization.

Other blockchains that use PoW

Bitcoin and Litecoin

Bitcoin is the first cryptocurrency in human history and the birthplace of the PoW mechanism; in turn, the energy-consuming PoW mechanism has become Bitcoin’s unique label. For the foreseeable future, Bitcoin will keep going with the PoW consensus mechanism.

In addition to Bitcoin, many early currencies borrowed from Bitcoin and adopted the PoW mechanism, such as Litecoin (LTC). Moreover, several forks of Bitcoin also adopted the PoW mechanism as well, such as Bitcoin Classic (BGH), Bitcoin Cash (BCH), etc.


Ethereum, born in 2014, also uses the PoW consensus mechanism. However, considering several shortcomings of the PoW mechanism, Ethereum is about to shift to the PoS (Proof of Stake) consensus mechanism, which consumes less energy and is more efficient, and this process is exactly what they call ETH 2.0.
At the end of 2020, Ethereum has already gone live with a beacon chain using the PoS consensus mechanism, and it is expected that the Ethereum main chain will merge with the beacon chain during 2022, thus completely transforming to the PoS consensus mechanism.
In addition to Ethereum, several cryptocurrencies that previously used the PoW consensus mechanism are also being considered for conversion to the PoS mechanism, such as Dogecoin (DOGE).


As the earliest blockchain consensus mechanism, the PoW was widely used and has inspired all subsequent blockchain projects. The PoW mechanism has both irreplaceable advantages and significant disadvantages. As the blockchain industry grew and the number of users increased, the problem of energy wastage and lack of efficiency of PoW mechanisms also emerged.
At present, various new public chains have emerged under the banner of being more decentralized, energy-efficient and efficient, harvesting a number of new users, but in the end, it is difficult to shake the status of Bitcoin, which still uses the PoW mechanism. In the future, will there be a “perfect consensus” that solves the problems of the PoW mechanism, while maintaining security and decentralization? It is worth keeping an eye on.

Author: Ashley Translator:Ashley
Reviewer(s) : Hugo , Edward

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Author: Ashley
Translator: ashley
Reviewer(s): Hugo, Edward, Jiji
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