In this article, you can understand the Proof of Work (POW) in blockchain technology. But before understanding the Proof of Work (POW), you should first know the blockchain consensus, what is consensus or how it works?
So what is the blockchain consensus mechanism? The system ensures that everyone in the network uses a mutually recognized version of the blockchain. The perfect combination of social and technological engineering requires agreement (or consensus) on a single data value or network part in a decentralized or distributed system. As a result of consensus, a new block is created and added to the chain.
In other words, this is to check whether anyone is tampering with the blockchain ledger by ensuring that everyone (or, more specifically, everyone involved in blockchain governance) agrees which transactions are correct and which are incorrect. This is really important for a self-regulated decentralized community because there is no single agency that can determine the content of the ledger. The powerful consensus mechanism ensures a fair, accurate and secure blockchain ecosystem.
Proof of work:
In the field of consensus mechanisms, the most famous is Proof of Work (PoW). Since 1993, PoW has been almost synonymous with the Bitcoin network and is actually a method of preventing denial of service attacks.
How does it work?
As the name suggests, Proof of work (PoW) aims to prevent malicious or fraudulent activities on any type of network by requiring service users to do some work. In this sense, “work” usually refers to the time that the computer can handle.
Proof of work (PoW) uses the same basic working concepts as before but applies to the network chain. In the blockchain, PoW miners compete with each other to create the next block in the chain. They competed against each other to solve mathematical problems with proofs. These problems are challenging to solve, but the solutions are easy to check quickly.
The first miner to solve the puzzle correctly will create the next block and broadcast it to the entire network. All other miners will then verify that the solution is correct, and if it is correct, some tokens will be awarded to the successful miners.
In fact, mining (and problem-solving) is done by computers that require energy to run. Therefore, mining is a costly activity, and it is only worth it if you can be the first to solve the puzzle and get token rewards on a regular basis. So how does it prevent cheating? Any block containing invalid transactions will be automatically rejected by the network. This means that even trying to cheat is expensive. The resources required for mining without receiving any token rewards are impractical and very unprofitable.
What are the advantages of Proof of work?
The great benefit of proof-of-work is that it really works. It may sound complicated (in large part because it does), but if it is applied correctly, it can be very effective in reaching consensus in a decentralized system and preventing attacks on the network.
What are the disadvantages of Proof of work?
So what’s wrong with Proof of Work (PoW)? We cannot ignore the fact that Proof of Work requires vast amounts of energy to solve complex problems. To give you an idea of the amount of energy we are talking about, recent estimates from the University of Cambridge show that the energy consumption of Bitcoin is equal to the energy consumption of Switzerland. If Bitcoin or any other Proof of Work (PoW) network is widely adopted, energy consumption will increase dramatically.
Another major problem with Proof of Work (PoW) is that ordinary people use their normal CPU, GPU, or ASIC equipment for mining success is very small because they compete with mining pools that use tens to thousands of equipment for mining. In the battle for pure computer power, a mining pool with unlimited processors will almost always win. It is believed that about half of all mining activities occur in a few mining pools. In addition to violating the decentralization principle of the blockchain, the owners of these pools may also use their hash power to unite and rule the Bitcoin blockchain. In fact, an authority with more than 50% hash power can manage the blockchain. This type of intrusion is called a 51% attack.