Since its launch in 2009 by the enigmatic Satoshi Nakamoto, bitcoin has revolutionized the way we think about financial systems thanks to blockchain technology. At the heart of this transformation is proof of work (PoW), a key mechanism that ensures the security and integrity of blockchains. But how exactly does it work, and what challenges does it raise?
PoW is a process of validating transactions in blockchain networks, such as Bitcoin. To add a block of transactions to the blockchain, miners—the participants in the network—must solve complex mathematical problems. These problems involve finding a “nonce” (number used once), a random number, which, when combined with the block’s data, generates a hash (or cryptographic code, which is actually another number) that must be less than a predefined target value. This computationally and resource-intensive challenge ensures that only legitimate blocks are added to the chain.
