What is proof of work in Bitcoin
- blockchain Blockchain
what is proof of work in bitcoin ?
Satoshi Nakamoto solved a thought experiment called the Byzantine Generals problem which asked, how can you be certain that an unknown actor is passing trustworthy information. The short answer is to have each person answering perform work by solving a problem where only an answer that is agreed to by most of the other participants is rewarded. This work has a cost in computing time (and therefore computer infrastructure and electricity, and therefore money, unless your computers or power is free). As a result, people will generally not pass bad data because there's a low probability of having the new block accepted by others and therefore you will be spending money with almost no chance of making any. The best course is to work honestly within the system to have a small chance at a reward. Spread out over pools, etc, this puts a massive amount of computers into calculating the same block in competition and leaves very little room for bad actors to write invalid blocks that could steal or create funds.
This is very secure, but also quite slow and wasteful because the massive amount of computing power/electricity is used to try many random calculations in the hopes of finding one that has a low enough number to "win" the block. But none of that calculation power actually does anything to write to the blockchain. All the transactions actually written to the blockchain is performed by a small single-board-computer housed on the ASIC miner machines. Bitmain, for example, uses Beagle Board SBCs that are quite similar to a Raspberry Pi.
Other consensus mechanisms like DPoS - Delegated Proof of Stake - uses tokenholder voting to select high power computers to validate each new block without competing via calculations. As a result, these can operate much faster and perform a lot of computing processes for smart contracts. Telos DPoS produces blocks 1,200X faster than Bitcoin and can perform tens to hundreds of millions of calculations per 24 hours compared to Bitcoin which maxes out at around 1.5m tx/24hrs. See https://blocktivity.info for current statistics.
Proof of Work describes the consensus method used in the process of mining Bitcoin, Ethereum or various other cryptocurrencies. As opposed to Proof of Stake or Delegated Proof of Stake, high class mining equipment is required to calculate the transactions of bitcoin.
For a long time PoW transactions were calculated by grafic cards, as they were more efficient in performing the transactions required to validate. Today mainly ASICs miners are used, which are highly specialized on this tasks.
A key issue with PoW is the consumption of electricity. On a global basis it is assumed that power required to keep the bitcoin network up and running is comparable to the usage of Denmark.