Proof of Work Explained: Why Blockchain Trusts Math, Not People

One of the top features of blockchain is its security, and because of that, one has to maintain integrity by ensuring investors that their assets are indeed safe. This action manifests into what is usually called Proof of Work (PoW).

This article aims to explain what proof of work is in blockchain, how it works, why it is necessary to maintain the system’s transparency and security, and what are its strengths and weaknesses.  Furthermore, what are the distinctions between PoW and PoS.

What Is Proof of Work in Blockchain?

As indicated by its name, Proof of Work is a method to check if a computer has done hard work to solve a mathematical problem required before it can add a new block to the system.

This process ensures that adding new information to the blockchain isn’t something that can be done carelessly or instantly. It demands real effort, computational power, and time so that only those who contribute to the network can participate in securing it. This “work” acts as a shield, making the system harder to manipulate or attack. 

How Does Proof of Work in Blockchain Work?

The computers, called miners, are competing to guess the right numbers by doing lots of calculations until they get the correct answer. This process, called hashing, is done by compiling blocks of transaction history and generating possible answers according to the system’s rules.

If the computers guess the numbers correctly, they will provide proof to the network that they’ve done the hard work. The network will verify their effort, and if it’s valid, the block will be added to the system, called the blockchain. The other computers can also check if the work is legit through a process called consensus.

Proof of Work and Mining

Assume there is a competition and all the user’s transactions are being input into a line named the Memory Pool. The computers (miners) select some transactions from the Memory Pool (MemPool) to create a candidate block that can be officially added to the blockchain after deciphering the mathematical equations. If the hashing is accurate, the miners get to hold a new block and earn rewards.

The process above, generating a candidate block, doing the hashing, and getting a new block and rewards, is called mining. To simplify it, proof of work is the rules of the game to show the miners’ effort, while mining is the process of participating in the game and winning rewards.

Why Is Proof of Work Necessary in Blockchain? 

As mentioned at the beginning of the article, the blockchain has to maintain integrity so that investors feel safe storing their assets. One of the methods implemented to keep the blockchain secure is to provide Proof of Work.

In the digital world, it’s not wise to believe in third parties. Proof of Work is essential as the gatekeeper in the blockchain system, so it not only protects but also maintains its transparency by relying fully on computers.

By doing the mathematical equations, the computers have to exert not only energy but also time. This way, the attackers can’t input falsified data or mess up the system because the hashing comes at a significant cost. And after all, computers cannot be bribed.

Proof of Work Advantages

Proof of Work has many advantages that help ensure security and transparency, so investors don’t have to worry about their assets being stolen or tampered with.

High Level of Security and Decentralization

The mining process requires heavy computing power and doesn’t rely on a single entity, making the Proof of Work system difficult to hack. Attackers would require authority over more than 50% of the network’s computing power (also known as a 51% attack) to exploit the data in the blockchain. The cost of such an attack is extremely high and time-consuming, so it’s nearly impossible to break into the system.

Censorship Resistant

One of the advantages of being decentralized is that no single party can decide whether a transaction is valid or not. This makes Proof of Work resistant to censorship, allowing anyone to execute any transaction without fear of being blocked by the government or a third party.

Economic Rewards for Network Security

Miners who succeed in the hashing will get rewards consisting of new coins and transaction fees. This motivates them to maintain the network’s security so that they keep earning rewards. If they try to mess with the system or act dishonestly, they won’t get any rewards, and they’ll just waste the energy and resources they’ve spent mining. So, it’s in their best interest to follow the rules and keep the blockchain safe from attacks or any funny business.

Drives Renewable Energy Adoption

Though it is widely known that Proof of Work consumes a huge amount of energy, many mining companies have started shifting to renewable energy sources, such as solar and hydroelectric power, to reduce costs. This shift has led to a more environmentally friendly approach in some areas.

Proof of Work Disadvantages

While it has its strengths, it’s also important to highlight the disadvantages for investors to take into account. 

Slower Transaction Speed and High Fees

As previously mentioned, even though on the bright side Proof of Work is extremely secure, the process, from generating block candidates to earning rewards, is time-consuming. This delay often results in slower transaction speeds and higher fees, especially when the network is congested.

High Operational Costs

To participate in the mining process effectively, investors have to provide specific hardware such as ASIC miners, and a large supply of electricity. This makes the mining process exclusive and not something that just anyone can do. In addition, the more time-consuming the process, the more resources, like energy and hardware lifespan, are wasted.

The Difference Between Proof of Work and Proof of Stake

PoW and PoS are two different ways operated in the blockchain to confirm transactions and add new blocks to the network. The primary distinction is who gets to add the block.

Proof of work involves computers as miners that solve mathematical equations. The procedure requires a massive quantity of resources, such as mining devices, energy capacity, and time. In return for the high costs, the system becomes highly secure. Attackers would have to take control of over 51% of the total computing power to manipulate the system and steal assets, which is extremely difficult and expensive.

Meanwhile, proof of stake doesn’t require heavy computing. Instead, it uses a staking system where participants, called validators, lock a sum of their coins as a form of insurance. The more coins they stake, the higher the chance of being picked as the new block creator.

This process doesn’t involve a huge amount of resources. In fact, it is energy-saving and can be done quickly. However, it has its weaknesses, such as the potential for centralization, which makes the process feel unfair to some investors. The more coins a participant has, the bigger the chance they have to control the network. Moreover, it’s generally considered less secure than proof of work, unless the attackers own at least 51% of all the staked coins.

In short, PoW offers higher security, but in return, it requires high costs and wastes a lot of energy. With PoS, it’s more efficient and only requires minimal resources, but it’s more centralized and more likely to be tampered with if the system doesn’t have strong built-in protections.

Conclusion

Proof of work plays a big role in keeping the blockchain system transparent, secure, and trustworthy. It ensures that every block added to the network goes through a proper process that demands time, energy, and real effort, making it nearly impossible for attackers to sneak in and mess things up. Even though it’s not the most efficient method in terms of energy use or cost, PoW has proven to be reliable and resilient over time, especially when it comes to protecting investors’ assets from fraud or manipulation.

That said, it’s important to also acknowledge its downsides. Proof of work is expensive, slow, and not exactly environmentally friendly unless paired with renewable energy solutions. Compared to PoS, which is quicker and lighter on resources, PoW might seem outdated, but when it comes to security, it still stands strong. In the end, both systems have their pros and cons, and choosing between them depends on what the blockchain prioritizes: maximum security or greater efficiency.