Home » Proof of Work – A Really Simple and Detailed Explanation

Proof of Work – A Really Simple and Detailed Explanation

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In Blockchain and cryptocurrency explanations, we always meet these words, Proof of Work and Proof of Stake.

In this article, we will learn about proof of work.

What is Proof of Work?

Why is it mentioned ever so often?

How do we understand how it works?

We will learn all about it here in really simple, and non-confusing grammar.

What is Proof of Work?

Proof of work(commonly abbreviated to PoW) is a generally agreed-upon method that requires members and participants in a blockchain network to use their resources to solve random mathematical equations. Proof of work is widely used in cryptocurrency to validate transactions, produce new tokens, and secure the blockchain network. It was first successfully used on Bitcoin(BTC)

As it relates to cryptocurrency, cryptocurrency is built to be decentralized, this means that crypto is meant to function without any central authority ruling over it, like a government or a central bank, or an admin. The people in charge of crypto, are the people using the crypto, and proof of work is a way to keep everyone honest in the system. This is why crypto is known as a true democracy.

How does Proof of Work function?

Those who participate in validating transactions on the blockchain are called miners. When a transaction is initiated, they are pooled into a “Block”. A block contains an average of 500 transactions, but some blocks can hold 4,000 transactions. After the transactions are pooled into a block, miners compete to solve a highly complex and random mathematical puzzle. The winner gets to add the new block to the blockchain and is rewarded with some coin.

The proof of work model is a generally accepted model used to confirm and record cryptocurrencies in the blockchain.


You have to know that the miners tackle this problem using very expensive and high-end computers to solve these extremely difficult equations to be able to win and add a new block to the blockchain every 10 minutes.

A miner must be the first to generate a hash that is less than or equal to that of the block in order to win the rights to update the block and get the financial reward.

The reward for verifying a transaction on the bitcoin blockchain as of 2022, is about 6BTC

One reason this system works in cryptocurrency is that solving the equation to find the hash is difficult but verifying it isn’t. The process is difficult enough to prevent bad actors from destroying the system, at the same time, once a target hash is found, it’s easy for other miners to check it.

What is the purpose of Proof of Work?

Decentralization is one of the main visions of cryptocurrency. As mentioned above, this means that there is no central authority in charge. Therefore there is a need for security and proper guarding of the blockchain system.

The proof of work consensus was introduced to solve this problem, and so far it has done the job perfectly well. Since its mainstream usage starting with blockchain technology, it has maintained a high level of performance and it has done a great job of securing the blockchain technology from hackers who seek to successfully exploit the system, and keeping its participants honest while preventing threats like double-spending(an occurrence where someone spends a coin twice)

What is Proof of Work?


advantages of proof of work
advantages of proof of work
  1. The proof of work is highly secure. After over 10 years after its mainstream introduction, it has held up as the most trusted way of securing the blockchain ecosystem.
  2. It is highly rewarding. Miners earn rewards for successfully validating transactions and adding new blocks to the blockchain.


disadvantages of proof of work
disadvantages of proof of work
  1. High energy consumption: Proof of work requires a large amount of energy to support mining activities. It has been said the energy used for proof of work operation could be compared to the electricity used by a small country like Ukraine.
  2. Cost of operation: In order to compete with miners worldwide and earn a profit, a miner must purchase expensive, specialized hardware to compute the mathematical equations and produce the hash answer fastest.
  3. Difficulty Level: Due to computing capacity requirements, large crypto mining companies and mining pools are more likely to succeed at crypto mining and earn mining profits than individuals working alone.
  4. 51% attack: In the case a mining establishment/pool accounts for 51% of the total mining operations, then it can break the rules of the system, double-spending coins and blocking transactions. Developers are tackling this issue to make sure it does not become a problem.

Cryptos using Proof of Work?

  • Bitcoin
  • Ethereum (Ethereum will be off this list after its upgrade to Ethereum 2.0 which uses the Proof of Stake model)
  • Litecoin
  • Monero
  • Dogecoin


The term proof of work can be summarized as the police of the blockchain which prevents fraud in the system and also keeps the system in check, while also being a means to generate revenue for miners.

Do you have any further questions?

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