What is Proof of Work? A Brief Explanation for Beginners
Bitcoin uses a consensus algorithm called Proof of Work (PoW,) which is used in cryptocurrency networks such as Bitcoin, Ethereum, and others. It is designed to secure the network and prevent double-spending by requiring network participants, called miners, to perform a certain amount of computational work to validate transactions and create new blocks on the blockchain.
In PoW, miners compete to solve a complex mathematical problem by hashing a combination of the transaction data and a random number (called a nonce). The first miner to find a solution that meets the network’s difficulty level broadcasts it to the rest of the network and is rewarded with newly minted coins or transaction fees.
The other nodes on the network can verify the solution by checking that the resulting hash meets the difficulty level and that all the transactions in the block are valid. Once a block is added to the blockchain, the transactions it contains are considered confirmed. PoW is considered to be a secure and decentralized way of maintaining the integrity of the blockchain
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Note: Cryptocurrency investing can be volatile. This is not financial advice.