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Proof of Work (PoW)

[TOC]

PoW is a consensus mechanism used primarily in cryptocurrencies like Bitcoin.

Summary

Repeatedly compute the hash of the block header, constantly modifying a parameter, until a hash value that matches the target is found; this is the core idea of the algorithm.

Key Concepts

  • Difficulty determines approximately how many computations are needed to complete one operation.

  • Hash computation takes an input of any length and returns a fixed-length output; the generated hash is uniformly distributed.

Bitcoin

Constant difficulty formula: new difficulty = old difficulty * (time spent on last 2016 blocks / 20160 minutes) target = max target / difficulty

References

[1] Consensus Algorithms in Distributed System