In a proof-of-work network, miners use computing hardware to repeatedly try different inputs until they find one that satisfies a difficulty target set by the network's rules. This process consumes real computing power and electricity. The first miner to find a valid solution gets to add the next block to the chain and typically receives a block reward for doing so. Bitcoin has used proof of work as its consensus mechanism since it launched in 2009.
The security of a proof-of-work network comes from the real-world cost of the computation involved. Rewriting past transaction history would require redoing an enormous amount of computational work, which becomes prohibitively expensive as more computing power, or hash rate, joins the network. Most proof-of-work networks also periodically adjust their difficulty target so that new blocks continue to be found at a roughly steady pace, even as the total amount of mining power on the network changes.
The best-known drawback of proof of work is its energy consumption, since securing the network depends on large amounts of real-world computing power running continuously. This is one of the main reasons some other networks, including Ethereum, have chosen to use proof of stake or other consensus mechanisms instead, though proof of work remains the mechanism securing Bitcoin.
Key takeaways
- Proof of work secures a blockchain by requiring miners to expend real computational effort to add new blocks.
- Bitcoin has used proof of work since its 2009 launch, with difficulty adjusting to keep block production roughly steady.
- High energy consumption is the most common criticism of proof of work, compared with alternatives such as proof of stake.
Proof of Work — frequently asked questions
Why is proof of work considered secure?
Because altering past blocks would require redoing a huge amount of computational work, which becomes extremely expensive once a network has significant mining power behind it. This cost is what deters most attacks on a well-established proof-of-work network.
Does every cryptocurrency use proof of work?
No. Bitcoin is the most well-known example, but many other networks use proof of stake or other consensus mechanisms that do not rely on competitive computational work at all, and each approach makes different trade-offs around security, decentralisation, and energy use.
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