Proof of Work (PoW) in Cryptocurrencies

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Cryptocurrencies

Proof of Work (PoW) is a system that requires an inconsequential but reasonable amount of effort to prevent frolicsome or malevolent uses of computers for instance sending spam emails and launching denial of service attacks. This concept was consequently reformed to securing digital money by Hal Finney in the year 2004 through the idea of “recyclable proof of work” by utilizing the SHA-256 hashing algorithm. But only this year there are new techniques and algorithms to make it easier for you to get benefits on bitcoin using computers and even android gadgets.

In a nutshell, Proof of Work (PoW) is a decentralized algorithm that demands the participants and members of the network to put efforts into resolving a subjective mathematical puzzle to secure people from manipulating the system. This consensus mechanism is globally used in cryptocurrency mining to validate the transactions made and in the mining of new coins or tokens. 

The presence of Proof of Work has made a lot of procedures convenient. Because of Proof of Work Bitcoin and all other cryptocurrency transactions can be done peer-to-peer in a safe and protected way without the requirement of a third party or outside force. Furthermore, Proof of Work needs big amounts of energy. To increase the amount of energy you need more miners to join the network. 

What Is Proof Of Work? 

Proof of Work (PoW) is an algorithm used by various cryptocurrencies to generate blockchains. This consensus mechanism requires nodes on a network to bring proof that they have done work to achieve in a decentralized manner and to preclude bad workers (actors) from outdoing the network. 

How does A Proof of Work Mechanism Validate a Cryptocurrency Transaction? 

The process is completely random or you can say arbitrary. If we take the example of Bitcoin, it includes duplications of hashing algorithms SHA-256. Whoever wins the round of hashing gets the authority to record all transactions from the mempool right into the next new block. As the winner for the round is chosen completely randomly depending on the proportion of work the winner has done, it encourages all other people on the network to work honestly and record only the actual transactions. Those who win also receive a variety of prizes and rewards.

Coins Using Proof of Work

Here are some coins listed for you that use the Proof of Work mechanism. 

Bitcoin

This is the first-ever cryptocurrency to ever launch. It dates back to 2009, and at that time it caught the eyes of a lot of the population and took the world by storm. This crypto-asset introduced the idea of Proof of Work in cryptocurrency. This concept was later adopted by all other crypto coins generated and designed after it. 

Litecoin

Litecoin is also known as lite Bitcoin as it has a lot of similarities to Bitcoin. This crypto coin is known as one of the earliest altcoin or alternative coins. It was officially launched in the year 2011 and was based on the original code of Bitcoin. It offered improved transactions and better speed. Litecoin is also known for using the Proof of Work consensus mechanism. 

Dogecoin 

Dogecoin is another crypto coin that was launched in the year 2013. It is also an alternative coin to Bitcoin and uses the Proof of Work mechanism. Moreover, this cryptocurrency is based on Doge Meme and got a lot of fame due to this particular treason. Though it started as a joke, it still was able to get a huge loyal following. 

Proof of Work was a choice of all early cryptocurrencies that were in dire need of a secure and decentralized way of making transactions. In contrast to its Proof of Stake, another consensus mechanism has emerged and can consume less energy. But still Proof of Work is in use by many crypto firms. 

Why Is There a Need for Proof of Work? 

Proof of Work is used to protect users from printing extra coins they did not earn in reality or from preventing them from double-spending. If users could use their coins or tokens more than once it would make the currency of no value.  

If we look at most of the usual currencies, this problem seems quite easy to solve. The banks that are responsible for the system have to keep a record of the amount of money every person has. But when it comes to crypto assets, there is nothing like this. The Proof of Work mechanism brings the proper solution for it. 

Conclusion

Proof of Work is a tool that protects blockchain and assists in marinating proper and complete data and information about all transactions. The nodes or you can say nodes present in the network compete to see who can solve a difficult puzzle. This mechanism is used by a variety of crypto assets.