What is Proof of Work in Consensus Algorithm?

PROOF OF WORK IN BLOCKCHAIN CONSENSUS ALGORITHM www.bitdeal.net

Proof Of Work (POW) This concept was firstly used by sathosi Nakamoto - the inventor of bitcoin. The release of bitcoin white paper denoted that “ The only way to overcome the 51% attack is Proof - of work concept” “51% attacks are nothing but whenever a single entity control over 50% of the entire network hash rate, then it will be considered as a 51% attack. “ www.bitdeal.net 2

How blockchain(POW)? a block gets validated in Proof of work will prevent this attack by distributing the hash rate, and mining power throughout the network. This idea was published by Cynthia Dwork in 1993 but was named as “Proof of work” by Markus Jacobson in 1999. www.bitdeal.net 3

How POW Works? It is solely used for the mining process. In the Mining Process, you have to solve complex mathematical puzzles in order to search for a particular crypto coin. For the miner, this process will be very difficult but for the network, it will be easy to check it. www.bitdeal.net 4

And moreover I just want to convey one thing, we all are thinking that “mining is solving problems”, but what mining actually is “validating a particular block”. Mining is used to check out the legitimacy of a particular appended block in the chain. www.bitdeal.net 5

Normally a block consists of 1. 2. previous hash(I.e hash of the previous block ), data(I.e sender address, receiver address, transaction amount); hash(I.e like a unique digital fingerprint) nonce(I.e Random value) 3. 4. www.bitdeal.net 6

1. All the bitcoin transactions will be bundled up together in a block. 2. Miners verify the transactions within a block, about the legitimacy. 3. In order to validate or verify a block, miners have to solve several complex maths problems. 4. When a block is verified, then it will be added to the blockchain. www.bitdeal.net 7

5. Finally, the miner who solves the puzzle first will be treated as the winner, and he will be announced to the entire network. 6. The miner will be reward with a certain newly created cryptocurrency. 7. In this entire Proof of work concept, miners have to set up large mining rigs and have to spend a lot of electricity to validate a single or particular block. www.bitdeal.net 8

Disadvantages in POW During the mining process, miners have to generate a lot of assumptions in order to clear the puzzle. Example: You have given with a key, and there are around 12 locks, so in order to open the exact lock you have the maximum probability of 11:1, So here you have to execute almost 11 assumptions. This is what works in POW too. www.bitdeal.net 9

Disadvantages in POW During the mining process, miners have to generate a lot of assumptions in order to clear the puzzle. Example: You have given with a key, and there are around 12 locks, so in order to open the exact lock you have the maximum probability of 11:1, So here you have to execute almost 11 assumptions. This is what works in POW too. www.bitdeal.net 10

Here one bitcoin transaction required to utilize the electricity consumption of 1.57 American households per day. ( Average size of a home is ~2700 sqft) A recent report says, that the bitcoin transactions would consume the electricity as a whole used by the entire Denmark city by 2020. www.bitdeal.net www.bitdeal.net 11

POW Allows anyone to take part in mining. So this causes the entire network to delve into the new cryptocurrencies and may cause the cryptocurrencies value to depreciate. Explore more Blockchain Algorithms. www.bitdeal.net 12

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What is Proof of Work in Consensus Algorithm?