In this guide, we are going to see PoW which is Proof of Work in detail along with its working and an example. So, let’s take a look at working first.

## How does PoW work?

Proof of Work(PoW) is the original consensus algorithm that is used to confirm the transaction and to create a new block to the chain. In this algorithm, to complete the transaction on the network, minors (a group of people) compete against each other. The process of competing against each other is termed mining. As soon as miners get success to create a valid block, he gets rewarded.

building a proof of work can be a random procedure that has a low probability. In this, a lot of trial and error is required before a valid proof of work is generated. The main working principle of proof of work is a mathematical puzzle that can easily prove the solution. With the help of the Hashcash proof of work system, we can include Proof of work in blockchain.

As we know, a blockchain is made up of blocks of transactions. In the proof-of-work algorithm, every block of transactions has a specific hash. A crypto miner needs to generate a target hash that’s less than or equal to that of the block so that the block gets confirmed.

In more technical words we can say that miners use mining devices that rapidly generate calculations. The purpose is to be the first miner with the target hash. Because the first miner can update the blockchain and receive crypto rewards.

You must have got curious about the block? right? Well, the block is composed of a block number, data field, cryptographic hash associated with it, and a nonce. The nonce is responsible for making the block valid.

## Example of PoW

Bitcoin is the most popular application of Proof of Work(PoW). Bitcoin transactions have to go through a security verification and are grouped into a block to be mined. With the help of Bitcoin’s proof-of-work algorithm, a hash is generated for the block. It uses SHA-256 to generate the hash.

To be the first miner to generate a target hash, miners race and the winner gets to add the latest block of transactions to Bitcoin’s blockchain along with Bitcoin rewards(newly minted coins and transaction fees).

the aim of the proof-of-work algorithm used by Bitcoin is to add a new block every 10 minutes. To work out this, it needs to adjust the difficulty of mining Bitcoin depending on how speedily miners are adding blocks. The hash computations get harder if mining is happening too quickly. While, If it’s going too slowly, they get easier.

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