The Proof of Work Consensus Mechanism
Proof of work (PoW) refers to a system that deems a considerable but manageable amount of work necessary so that thoughtless or harmful utilization of computing resources is discouraged. Such harmful utilization includes, but is not limited to, spam emails or conducting denial of service attacks. Hal Finney adopted the PoW concept to secure digital money in 2004. He did this by making use of the SHA-256 hashing method and the notion of “reusable proof of work.” Having said that, no discussion of PoW would be complete without mentioning Bitcoin, the cryptocurrency that popularized it.
Bitcoin is the world’s first cryptocurrency. Its concept was extensively laid out in a whitepaper by the pseudonymous Satoshi Nakamoto, whose identity still remains a mystery. It was first introduced in 2009, and since then, thousands of cryptocurrencies have followed suit, i.e., Bitcoin was responsible for bringing cryptocurrencies into the mainstream and popularized the distributed ledger technology known as blockchain, which has uses beyond the financial sector. Even retail behemoths like Walmart and Carrefour use blockchain technology to optimize their supply chains.
What forms the basis of the cryptocurrency’s functioning is PoW. Also, many other cryptocurrencies, including Bitcoin, are based on proof of work, which allows for safe, decentralized consensus.
