Proof-of-Work

Definition ∞ Proof-of-Work (PoW) is a consensus algorithm that requires participants, known as miners, to solve complex computational puzzles to validate transactions and add new blocks to a blockchain. The difficulty of these puzzles necessitates significant computational power and energy expenditure, serving as a deterrent against malicious activity. Successful miners are rewarded with newly created cryptocurrency and transaction fees, securing the network through economic incentives tied to computational effort. It is a foundational mechanism for many prominent cryptocurrencies.
Context ∞ Proof-of-Work remains a subject of intense discussion, particularly concerning its environmental impact and energy consumption. News cycles frequently report on the energy usage of major PoW networks like Bitcoin, sparking debates about sustainability and the viability of alternative consensus mechanisms. Discussions also address the security guarantees offered by PoW, its resistance to certain types of attacks, and the ongoing evolution of mining hardware and strategies.