Blockchain Technology – Proof of Work

Although most people don’t like to educate themselves on studying a whole new field, they need to understand the theory and the fundamentals behind a particular topic. In the cryptocurrency world, it is vital to understand the differences between two major systems that have become the essence of blockchain technology. Moreover, they will need to get familiar with their advantages and drawbacks. After that, they would instead start investing, trading, mining, or educating others about the new decentralized world.

Proof of work is considered a consensus algorithm which would mean that there is no single authority over the transactions that take place on the blockchain, the blocks that are being built, and all the other participants in the digital world. Through a distributed ledger, everybody can monitor and understand what happens when a transaction takes place. Since the information is public and cannot be manipulated, people have access to the same database, and therefore, nobody can feel underprivileged compared to others.

The blockchain technology itself has a responsibility to store information permanently, efficiently, and securely. The miners compete against each other to add new blocks to the network and execute proof of work every time an additional block is built. Then, the work for the correct solution to the computational puzzle is recorded on a particular block in the network which represents the proof.

Without this system, we would have the current number of cryptocurrencies in circulation, and everything will have reached its final limited supply. Additional features of the system include cyber protection, an increase in the number of decentralized networks, and giving incentives to miners to do their work so that blockchain technology can advance more rapidly. Hence, we can consider the Proof of work system to be a leading model in the crypto community – a model without which the crypto world would not grow and develop.