Proof of work is a consensus mechanism in which participants demonstrate computational work under a network’s rules. Bitcoin uses proof of work as part of its process for ordering blocks.
The basic idea
Bitcoin’s white paper describes a proof-of-work system based on searching for a value which, when hashed, meets a required condition. The work is difficult to produce but straightforward for other nodes to verify under the protocol.
In Bitcoin, the successful result is associated with a proposed block. Other nodes can then check the block and the proof against Bitcoin’s rules before accepting and relaying it.
A term with a defined scope
Proof of work is not a description of every blockchain. Different networks can define different work functions, difficulty rules and block-validation arrangements. Ethereum moved from proof of work to proof of stake, so it should not be described as currently using proof of work for consensus.
What this term does not answer
The phrase does not establish a network’s value, safety, environmental impact, investment suitability or outcome for any participant. Those are separate questions and cannot be inferred from the label alone.
Sources
- Bitcoin: A Peer-to-Peer Electronic Cash System
- Bitcoin Developer Documentation: Block Chain
- Ethereum.org: Proof-of-Stake
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