Proof-of-Work (PoW) is a consensus algorithm used by many blockchains to verify the validity of transactions made on the network, which are grouped into blocks and then recorded on the public ledger in a way that can be accessed by anyone. Some of the most popular blockchains using PoW are Bitcoin, Dogecoin and Monero.
In today’s article, we will explain how the consensus algorithm works and analyse its strengths and weaknesses.
Proof of Work: Purpose and Functioning
First theorised by Hal Finney in 2004 as Reusable-Proof-of-Work (RPOW), a precursor to the model later presented by Satoshi Nakamoto in his famous whitepaper, the PoW is a consensus algorithm that aims to ensure the proper functioning of a decentralised network of anonymous participants without them having to trust each other.
Since blockchains by design do not have a centralised authority (such as a bank) to act as an intermediary between network participants, this task falls to the consensus algorithm, which has the i
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