Proof of work

Proof of work (PoW) is the method the Bitcoin network uses to agree, without any central authority, on which block goes onto the blockchainGlossaryBlockchainBitcoin’s public ledger: a chain of blocks in which each block refers to its predecessor. Anyone wanting to change an old entry would have to recreate all the blocks that follow it.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →× next.

How it works

Miners search for a block header whose hashGlossaryHash (hash value)A fixed-length digital fingerprint that a hash function calculates from any data. Even the tiniest change produces a completely different value, and the original data can’t be worked out from the hash.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →× is no greater than a given target. The result can’t be predicted, so the only option is trial and error: change a number in the header (the nonceGlossaryNonceA 4-byte number in the block header that miners change over and over during proof of work until the hash of the block header is less than or equal to the target. Each new value is a new attempt.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×), hash the 80-byte header twice with SHA-256, compare, repeat.^[1] All miners together currently reach a hashrateGlossaryHashrate (computing power)How many hash attempts per second a mining device or the whole network makes. The network hashrate shows how much computing work secures Bitcoin.In the glossary →× of around 969 EH/s; 1 EH/s is a quintillion (10¹⁸) attempts per second.

Finding a solution takes an enormous amount of computing work; checking it takes a single hash calculation. The difficulty adjustmentGlossaryDifficulty adjustmentEvery 2,016 blocks, each node recalculates the mining target so that on average a block is created roughly every ten minutes – regardless of how much computing power is currently at work in the network.On the learning path: Stage 2 · Step 2 – Halving & 21 million →In the glossary →× keeps the gap between two blocks at around ten minutes on average.

Why Bitcoin needs it

According to the whitepaper, computing power decides rather than headcount – ‘one-CPU-one-vote’: getting hold of lots of IP addresses gains you nothing. Anyone wanting to change an old block has to redo its work and that of all the blocks after it, and overtake the honest miners in the process.^[2]

The price is high energy consumption; figures and opposing views are in Energy & the environment.