Proof-of-Work: An Introduction to Consensus Mechanisms

Hi everyone! Welcome to this weeks post on Bit Education. Every Thursday I’ll be sending out a quick, education-packed newsletter containing:

• Either an article about either blockchain technology or cryptocurrency

• Articles or posts that I think would be useful to your learning

• A though provoking excerpt from a book I’m reading

These are informative posts, meaning there will be certain spots where you might not be familiar with the content. I suggest that you do external reading from the links that I will at the end of each post.

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How to best use this post.

1. Take notes while you read the post. I challenge you to discuss the ideas outside the newsletter with friends and family.

2. Read the extra links provided, and apply the information from those posts to come to your own conclusion.

3. Truly digest the book quote. Reflect on how it can apply to your life.

Proof-of-Work: An Introduction to Consensus Mechanisms

Decentralised networks run on what is called consensus mechanisms. These are protocols that are used to verify transactions on a network as there is no middlemen such as a bank to do so

Proof-of-Work (PoW) is a cryptographic proof and consensus mechanism, in which one party (the prover) proves the others (the verifiers) that a specific amount of computational effort has be expended

Invented in 1993 by Moni Naor and Cynthia Dwork to deter denial of service attacks and spam on networks, this idea was later taken and applied to Bitcoin.

With the Bitcoin PoW system, miners compete to verify transactions and mine new digital currency.

The WORK - the computation - must be hard enough yet feasible on the prover or requester side, but easy to check for the verifier or service provider.

The purpose of proof-of-work algorithms is not to prove that a computation or cryptographic problem was done or solved. But to determine that data is not manipulated by establishing large energy and computational power has been provided.

Proof-of-Work, and Proof-of-Stake (Pos) - which we will talk about in following articles - are the most popular consensus mechanisms in the context of cryptocurrency.

Ben - AKA Waldo

Further Reading

Book Excerpt

“Not action should be undertaken without aim, or other than in conformity with a principle affirming the art of life.” - Marcus Aurelius, Meditations

No action wi/thout aim. Marcus Aurelius’ insistence on the importance of a clear aim or purpose. Even if the universe is purposeless, you should not be without purpose yourself.

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