WHAT IS PROOF OF WORK
Proof of Work (PoW) is a foundational Consensus mechanism in blockchain technology. The Consensus mechanism is supposing a blockchain is shared among people. One of the members wants to change the data or the block’s hash.
The data or hash of a block can only be changed once every blockchain community member agrees with the change. It resembles taking a poll. Most members should agree before proceeding with the change/decision. If the decision gets enough votes, the change will be accepted, and data will not be altered.
TYPES OF CONSENSUS PROTOCOL
- PROOF OF WORK (PoW)
Proof of work is a well-known example of a Consensus mechanism where miners compete to solve intricate mathematical problems. The miner who discovers a valid solution first can append the subsequent block to the blockchain. These computational puzzles define the decentralized agreement and transaction validity in the future.
- PROOF OF STATE (PoS)
In PoS, validators/speakers are chosen to create new blocks and validate transactions. Transactions can vary with the amount of cryptocurrency they are willing to “stake” as collateral. The more cryptocurrency someone stakes, the more chances there are to add the new block. There is no solving computational puzzles or waste of power as compared to PoW.
Some crucial prerequisites for Consensus protocol
- HASHING ALGORITHM
- It states that the data inside the block can not be changed. If the block is meddled, its hash changes, giving it a new code. This will create a stir as the next block containing the previous block’s hash (and one of its own) will be declared false, creating a cascade of a wrong hash of the blocks.
- IMMUTABLE LEDGER
- Any change in the data without passing the consensus protocol will not affect the blockchain. Given that every member has a copy of the blockchain, altering the data inside the block will make it not match with other members, eventually leading to no effect on the block.
- MINING
- Mining is the process of adding or appending a block inside the blockchain. It can be done after clearing the consensus protocol and solving the mathematical problem, making it proof of work done by the miner.
- DISTRIBUTED P2P NETWORK
- Peer-to-Peer Network is a decentralized and distributed network where the people sharing the blockchain share information directly with each other or make transactions using smart contracts, which enhances the system’s data integrity.
WHY DO WE NEED PROOF OF WORK
- PREVENT ATTACKS
- Miners have to solve a mathematical problem to create a block that they append at the end of the blockchain. This mathematical problem serves as proof of work done, that is, finding the solution from which they can create the block. Miners are rewarded with incentives for solving the equation and transaction fees for adding the block to the blockchain.
- All the other nodes sharing the blockchain run an algorithm to verify if the data is valid or correct to add. If it is, the miner will be rewarded with incentives and the block added. If not, the change will be rejected, data will not be altered, and the incentives will be declined.
- This algorithm is a simple process; a few seconds is enough to verify whether the data is valid.
- COMPETING CHAIN PROBLEM
- The Consensus Protocol says that the blockchain with the Longest chain will be accepted.
- The number of members in one of the groups sharing different blockchains will dominate as they will have more members, leading to more hashing power, which means more computational power than the other group. They will be able to create a new block faster. Hence, the new alliance formed will make their blockchain the longest.
- All the transactions in the other block, also known as the Orphan Block, will be dropped, and the miner that had mined the block will not get any reward.
ENVIRONMENTAL ISSUES OF PoW
When miners compete to solve complex puzzles, high electricity consumption leads to evil and notable environmental issues.
APPLICATION
PoW ensures secure transaction validation and trust, which maintains the integrity of blockchain networks. The main application of PoW is Bitcoin (BTC).
CONCLUSION
- PoW is proof of work, where miners are given complex mathematical questions to solve and provide solutions as proof of work done to add a block to the existing P2P blockchain.
- It is a pivotal consensus mechanism protocol. Another one is PoS, proof of state.
- PoW also contributes much to the security and integrity of decentralized networks.
- To study PoW, one must have the prerequisites of hashing algo, immutability, mining, and P2P networks.
