What Is PoW (Proof of Work)?

Miners continuously compute hashes by changing values such as the nonce in the block header, looking for a value smaller than the target set by the network. Finding such a value is very hard, but checking its correctness is extremely easy; this asymmetry is the basis of PoW. On Bitcoin, difficulty is adjusted every 2,016 blocks; this way, even if the total hash power on the network changes, the average block time stays at about 10 minutes.

In PoW, security rests on the cost of altering history. For an attacker to reverse confirmed transactions, they need more computing power than the rest of the network; this is called a 51 percent attack. On large networks such as Bitcoin, this is economically deterred because it would require a massive investment in hardware and energy. Litecoin and Dogecoin are also networks that use PoW.

The most criticized aspect of PoW is its high energy consumption. In addition, the spread of specialized hardware called ASICs can concentrate mining in large-scale operations and mining pools. Its defenders, on the other hand, argue that the energy spent is an unforgeable cost that ties the network's security to the physical world.