Proof of Work is a method to validate blockchain transactions. It’s one example of a consensus mechanism: a system of predefined rules that, by achieving consensus, guarantees the legitimacy of blockchain transactions.
There are many real-life examples of consensus mechanisms. Town halls, for example, rely on procedure manuals that specify rules for conducting meetings and taking votes. Academia uses peer review: a process in which papers are scrutinized by multiple experts before they’re published. These are different mechanisms (systems) for achieving consensus (agreement).
With Proof of Work, the mechanism for achieving consensus may seem peculiar: people race to solve complex math puzzles using powerful computers. When the puzzles are solved, consensus is achieved.
Sign up to our weekly MoonPay Minute newsletter
Peering under the hood
How can solving complex math puzzles work as a consensus mechanism?
It’s important to remember that most blockchains are entirely decentralized–nobody is in charge. Without a central entity running the show, there must be a system in place to prevent illegitimate activity such as double spending (when the same cryptocurrency token is spent more than once).
Proof of Work is one such system. It works like this:
-5.png)
This third point is crucial, because here we can see that the math puzzles aren’t so trivial. If someone wants to cheat and make a fake transaction (e.g., redirect 10,000 tokens to their wallet), they would need to go back and tamper with the blockchain.
But to do that, they would need a lot of computing power. In fact, they would need more computing power than the rest of the network combined. This can be so difficult and expensive that it may as well be impossible, and it’s why Proof of Work is considered tamperproof.
Things you should know
Subscribe to our newsletter!
Did you like this article? Sign up to our weekly MoonPay Minute newsletter to get similar content delivered directly to your inbox.