What is Proof of Work?
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The document discusses blockchain's consensus mechanisms, particularly focusing on proof-of-work (PoW) and proof-of-stake (PoS). PoW is described as a process for reaching consensus in decentralized networks through mining, which involves significant energy consumption and computational power, while PoS uses validators to confirm transactions with reduced environmental impact. It also compares the pros and cons of each mechanism, highlighting concerns regarding environmental harm, centralization in mining, and security issues.
What is Proof of Work?
- 3. TOPICS TO EXPLORE What Is Blockchain’s Consensus Mechanism? What Is Proof-of-Work? Proof-of-Work and Mining Example of Proof-of-Stake Proof-of-Work vs. Proof-of-Stake Cryptocurrencies Using Proof-of-Stake Criticism Of Proof-of-Stake Pros and Cons of Proof-of-Stake
- 4. What Is Blockchain’s Consensus Mechanism?
- 5. What Is Blockchain’s Consensus Mechanism? Blockchain consensus is the process through which the network's peers come to an understanding on the current state of the data and to verify transactions and maintain the security of the underlying blockchain Proof-of-Work Types Of Consensus Mechanism Proof-of-Stake Proof-of-Importance Proof-of-Capacity Proof-of-Elapsed Time Proof-of-Burn Proof-of-Authority
- 7. What Is Proof-of-Work? Proof-of-work is the process that enables the decentralized Blockchain network to reach consensus, or agreement, on issues like account balances and the chronological order of transactions Proof-of-Work Miner storing the transaction
- 9. Proof-of-Work and Mining BANK Sarah Ian Cheque
- 10. Proof-of-Work and Mining BANK Sarah Ian Cheque
- 11. Proof-of-Work and Mining BANK Sarah Ian Cheque Will I be debited exactly for the amount in the cheque? Will I be credited exactly by the amount in the cheque?
- 12. Proof-of-Work and Mining Miners and Proof-of-Work guarantee Transparent and Accurate transactions Cryptocurrencies No Bankers or Financial Institutions
- 13. Proof-of-Work and Mining Working Of Proof-of-Work Step 1: New Transactions are grouped together Transaction 1 Transaction 2 Transaction 3 . . . . . Transaction N
- 14. Proof-of-Work and Mining Working Of Proof-of-Work Hash Number: 0000000000000000 0008eddcaf078f12c6 9a439dde30dbb5aac 3d9d94e9c18f6 Block Name: #660000 Miner B Transaction 1 Transaction 2 Transaction 3 . . . . . Transaction N Step 2: Miners compete to process the new block Miner A Step 1: New Transactions are grouped together
- 15. Proof-of-Work and Mining Working Of Proof-of-Work Hash Number: 00000000000000 000008eddcaf078 f12c69a439dde30 dbb5aac3d9d94e 9c18f6 Block Name: #660000 Miner A Miner B Transaction 1 Transaction 2 Transaction 3 . . . . . Transaction N Miner A Step 1: New Transactions are grouped together Step 2: Miners compete to process the new block +6.25 Bitcoin Step 3: One Miner is chosen to add the block
- 16. Proof-of-Work and Mining Working Of Proof-of-Work Hash Number: 00000000000000 000008eddcaf078 f12c69a439dde30 dbb5aac3d9d94e 9c18f6 Block Name: #660000 Miner A Miner B Transaction 1 Transaction 2 Transaction 3 . . . . . Transaction N Miner A Step 1: New Transactions are grouped together Step 2: Miners compete to process the new block +6.25 Bitcoin Step 3: One Miner is chosen to add the block Because miners have spent a lot of money on the necessary computer hardware and energy, they are incentivized
- 18. Example of Proof-of-Work Block ID – ‘A’ Block Name - #123456 Mined Date – Aug 6, 2022 Block Hash - 00000000000000000008eddcaf078f12c69a439dde30dbb5aac3d9d94e9c18f6 Block Reward – 6.25 BTC
- 19. Example of Proof-of-Work Block ID – ‘A’ Transactions – 745 Bitcoins – 1666 Block Hash – 000000000000000000 08eddcaf078f12c69a439d de30dbb5aac3d9d94e9c1 8f6
- 20. Example of Proof-of-Work Previous Hash - ………………… Block ID – ‘A’ Transactions – 745 Bitcoins – 1666 Block Hash – 000000000000000000 08eddcaf078f12c69a439d de30dbb5aac3d9d94e9c1 8f6
- 21. Example of Proof-of-Work Previous Hash - ………………… Block ID – ‘A’ Transactions – 745 Bitcoins – 1666 Block Hash – 000000000000000000 08eddcaf078f12c69a439d de30dbb5aac3d9d94e9c1 8f6 Block ID – ‘B’ Transactions – 430 Bitcoins – 2023 Block Hash – 000000000000000000 08eddcaf079f12c71b439b de30cbb5bac3d9d94e9c1 9f7 HACKER
- 22. Example of Proof-of-Work Previous Hash - ………………… Block ID – ‘A’ Transactions – 745 Bitcoins – 1666 Block Hash – 000000000000000000 08eddcaf078f12c69a439d de30dbb5aac3d9d94e9c1 8f6 1667 INVALID! HACKER
- 23. Example of Proof-of-Work Previous Hash - ………………… Block ID – ‘A’ Transactions – 745 Bitcoins – 1666 Block Hash – 000000000000000000 08eddcaf078f12c69a439d de30dbb5aac3d9d94e9c1 8f6 1667 HACKER
- 24. Pros And Cons Of Proof-of-Work
- 25. Pros and Cons of Proof-of-Work Cons Pros Proof-of-Work is neutral It’s is harmful to the environment because it consumes a lot of energy It is a tried and tested consensus mechanism It is quite simple to implement compared to proof-of- stake You require such specific equipment if you want to mine Mining pools may end up ruling the mining game because of the rising computational demand
- 27. Proof-of-Work vs. Proof-of-Stake Proof-of-Work Proof-of-Stake Proof-of-Work uses lot of computational power Proof-of-Stake replaces the significance of computational power It uses miners to create and validate new blocks Validators take the place of miners in proof-of-Stake From a security standpoint, proof of work is more established Parties with significant cryptocurrency holdings may possess too much power
- 28. Proof-of-Work vs. Proof-of-Stake Proof-of-Work Proof-of-Stake Proof-of-Work uses lot of computational power Proof-of-Stake replaces the significance of computational power It uses miners to create and validate new blocks Validators take the place of miners in proof-of-Stake From a security standpoint, proof of work is more established Parties with significant cryptocurrency holdings may possess too much power
- 29. Proof-of-Work vs. Proof-of-Stake Proof-of-Work Proof-of-Stake Proof-of-Work uses lot of computational power Proof-of-Stake replaces the significance of computational power It uses miners to create and validate new blocks Validators take the place of miners in proof-of-Stake From a security standpoint, proof of work is more established Parties with significant cryptocurrency holdings may possess too much power
- 30. Proof-of-Work vs. Proof-of-Stake Proof-of-Work Proof-of-Stake Proof-of-Work uses lot of computational power Proof-of-Stake replaces the significance of computational power It uses miners to create and validate new blocks Validators take the place of miners in proof-of-Stake From a security standpoint, proof of work is more established Parties with significant cryptocurrency holdings may possess too much power
- 32. Cryptocurrencies Using Proof-of-Work BITCOIN (BTC) BITCOIN CASH (BCH) MONERO (XMR) LITECOIN (LTC) DOGECOIN (DOGE)
- 34. Criticism Of Proof-of-Stake To mine one Bitcoin in 2021, you would have required to use as much electricity as a typical American home would in nine years ENERGY REQUIREMENTS A few companies may end up owning most activities as mining has grown concentrated in a few number of significant organizations Centralization