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Bitcoin - What is Proof of Work in Mining? | Explained for Beginners


Bitcoin - What is Proof of Work in Mining? | Explained for Beginners

Simply put, Proof of Work is a system used by some blockchains to secure the network and verify transactions by performing mathematical computations that require a massive amount of processing power.

The first time you are included  in a conversation about Bitcoin mining, I am sure that you will be confused and overwhelmed. "Proof of what now?" "Like submitting a work assignment?" Let's say its kind of like that but don't worry I will try to explain. Just don't give up yet. 😁

Is Bitcoin the only Proof-of-Work cryptocurrency?

No! Although this blog focuses on Bitcoin, it is far from the only coin that utilises a Proof of Work system. Proof of Work is also used by popular coins such as Litecoin, Monero, Ethereum Classic, and Dash, as well as Bitcoin derivatives such as Bitcoin Cash. Ethereum was running on Proof of Work, but recently switched to Proof of Stake.

To keep things simple, this article will explain what is Bitcoin's Proof of Work system. It is important to note that Proof of Work is used by many other networks. Although it is very secure and as a matter of fact the Bitcoin's blockchain has never been hacked, its good to note that there are other new secure networks exists such as Proof of Stake mechanisms.

How Does Proof of Work work? So, what about work?

Look, Bitcoin, and Proof of Work in general, are complicated. So I want you to know that it's not your fault; it's all part of the plan. There's a reason why even the most technically advanced people in the world spend months researching this critical component of the Bitcoin protocol. Without getting too technical, I'm here to provide some practical examples of how Proof of Work (PoW) "works." While this will undoubtedly help you understand more than you already do. This should be the beginning of your understanding of PoW and Bitcoin mining, not the end.

How Does Proof of Work operates?

You've probably come across the term "Consensus" while researching blockchains. This is due to the fact that it exists in some form on every blockchain. These are hard-coded rules that are built into the Bitcoin software. No one can change these rules unless a large majority of users running the Bitcoin software, known as Nodes, agree. One of these rules is Proof of Work.

To update transactions on the Bitcoin Network, a mining computer must provide digital proof (Proof) that it has consumed the necessary energy (Work) to validate Bitcoin transactions. These Miners are then compensated for their efforts. Bitcoin validates every ten minutes and then chains together all current and previous results.

This kind of technology was initially developed as a technique for one computer to prove to the other computer that it wasn't acting maliciously.

Click here to claim $25 of Bitcoin from Nexo




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