consensus
  • README
  • Blockchain Consensus Encyclopedia Infographic
  • CONTRIBUTING
  • Introduction
  • Blockchain Consensus?
  • Glossary
  • Categorizing consensus
  • Chain-based Proof of Work
    • Proof of Work (PoW)
    • Proof of Meaningful Work (PoMW)
    • Hybrid Proof of Work (HPoW)
    • Proof of Work time (PoWT)
    • Delayed Proof of Work (dPoW)
    • Proof of Edit Distance
    • ePoW: equitable chance and energy-saving.
    • Semi-Synchronous Proof of Work (SSPoW)
  • Chain-based Proof of Stake
    • Delegated Proof-of-Contribution (DPoC)
    • Secure Proof of Stake (SPoS)
    • Hybrid PBFT/Aurand
    • Proof of Stake (PoS)
    • Delegated Proof of Stake (DPoS)
    • Proof of Stake Time (PoST)
    • Proof of stake Boo (PoS Boo)
    • High Interest Proof of Stake (HiPoS)
    • Asset PoS (APoS )
    • Traditional Proof of Stake / Tiered Proof Of Stake (TPOS)
    • Casper the Friendly Finality Gadget (FFG)
    • Correct By Construction (CBC) Casper
    • Variable Delayed Proof of Stake (vDPOS)
    • Proof of Stake Velocity
    • Magi's Proof of Stake (mPoS)
    • Leased Proof of Stake (LPoS)
    • Delegated Proof of Importance (DPoI)
    • Leasing Proof of Stake (PoS/LPoS)
  • Chain-based Proof of Capacity/Space
    • Proof of Process
    • Proof of capacity (PoC)
    • Proof of Signature (PoSign)
    • Proof of Retrievability (POR)
    • Proof of Location
    • Proof of Reputation (PoR)
    • Proof of Proof (PoP)
    • Proof of History
    • Proof of Existence
    • Proof of Research (DPoR)
    • Proof of Activity
    • Proof of Weight (PoWeight)
    • Proof of Zero (PoZ)
    • Proof of Importance
    • Proof of Care (PoC)
    • Raft
    • Proof of Value (PoV)
    • Proof of Participation (PoP)
    • Proof of Believability
    • Proof of Stake (POS) / Proof of Presence (PoP)
    • Proof of Ownership
    • Proof of Quality (PoQ)
    • Proof of Space (PoC)
  • Chain-based Hybrid models
    • GRANDPA
    • Proof of authority (PoA)
    • Ethereum Proof of Authority
    • Limited Confidence Proof-of-Activity (LCPoA)
    • Proof of Work (PoW) / Nexus Proof of State (nPoS) or Nexus Proof of Holding (nPOH)
    • Proof of Activity
    • Proof of Work (PoW) / Proof of Stake (PoS) / Proof Of Care (PoC)
    • Proof of work (PoW) / High Interest Proof of Stake (HiPoS)
    • Proof of Work (PoW) / PoM / PoSII
  • Chain-based Proof of Burn
    • Proof of Processed Payments (PoPP)
    • Proof of Burn (PoB)
    • Proof of Time
    • Proof of Stake (PoS) / Proof of Disintegration (PoD)
  • Chain-based Trusted computing algorithms
    • Proof of Elapsed Time (PoET)
  • Chain-based PBFT and BFT-based Proof of Stake
    • leaderless BFT dual ledger architecture
    • Albatross
    • asynchronous BFT protocol
    • BFTree
    • Byzantine Fault Tolerance (BFT)
    • Delegated Byzantine Fault Tolerance
    • Federated Byzantine Agreement
    • HotStuff
    • LibraBFT
    • Modified Federated Byzantine Agreement (mFBA)
    • Ouroboros
    • Practical Byzantine Fault Tolerance
  • Chain-based others
    • Proof of Trust (PoT)
    • Proof of Devotion
    • Snowglobe
    • Avalanche
    • Serialization of Proof-of-work Events (Spectre)
    • Scrypt-adaptive-N (ASIC resistant)
  • Chain-based DAG
    • BlockFlow
    • Direct Acyclic Graph Tangle (DAG)
    • Hashgraph
    • Block-lattice - Directed Acyclic Graphs (DAGs)
  • Magi's proof-of-work (mPoW)
  • Common Attacks
  • Performance indicators
  • ThresholdRelay
  • Holochain
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  1. Chain-based Proof of Work

Proof of Work (PoW)

PreviousChain-based Proof of WorkNextProof of Meaningful Work (PoMW)

Last updated 6 years ago

PoW was originally invented as a means to combat spam (see )if you make it computationally expensive to send email then spamming would be cost prohibitive while still being almost free for a normal user to send email.

Bitcoin, which made the blockchain technology popular, developed the so-called Proof of Work (PoW) algorithm. In principle, each participant on the Bitcoin network can participate in the block generation. In order to confirm the transaction and enter a block into the blockchain, a miner has to provide an answer, or a proof, to a specific challenge. Miners use PoW to validate transactions and mining new coins, but its main goal is to block potential cyber-attacks or suspicious activities within the network.

Miners

In cryptocurrency networks, “miners” are special nodes that perform the PoW calculation on a set of transactions plus the hash of the previous block to generate the next block in the blockchain. Since the block contains the hash of the previous block, changing a historical block would require regenerating all of the subsequent blocks. Regenerating all the hashes would be computationally intensive and would require a lot of energy – and energy isn’t free. It would also be time consuming. The process of proving work and generating blocks is called ”mining”. Miners are rewarded for this work with newly minted coins adding to the total supply.

Nodes

Nakamoto consensus to determine the next head block; that is, at its core:

"Nodes always consider the longest chain to be the correct one and will keep working on extending it. If two nodes broadcast different versions of the next block simultaneously, some nodes may receive one or the other first. In that case, they work on the first one they received, but save the other branch in case it becomes longer. The tie will be broken when the next proof-of-work is found and one branch becomes longer; the nodes that were working on the other branch will then switch to the longer one."

algorithm

  1. Transactions are bundled together in form of blocks.

  2. Miners verify the transactions within the blocks as legitimate.

  3. Miners then solve a mathematical problem known as the proof-of-work problem.

  4. A reward is then given to the first person to solve the problem.

  5. Verified transactions are stored in the public blockchain.

attacks

  • With a PoW coin the miners don't need to own an investment in the coin that they are attacking, so there might be an incentive for them to run a 51% attack.

Pros

  • Oldest and safest

  • Transaction fees not mandatory

  • Easy to verify solutions

  • Hard to find solutions

  • Difficulty of finding solutions can be precisely quantified

  • Provably inseparable from the block it secures

Cons

  • Poor performance

  • PoW uses an enormous amount of computing power, which, in itself lowers incentive

  • It is also vulnerable to attack, as a potential attacker would only need to have 51% of the mining resources (hashrate) to control a network, although this is not easy to do.

  • Reducing block rewards

  • Proof of Work restricts the inputs to the structure of given blockchains mining algorithm. In Bitcoin’s case this would have to be a nonce, and in Ethereum’s case the input must be a random integer, a nonce, and a seed hash of the block.

Read more

"Proof-of-work": . Dwork C, Naor M. '92.

. Back A. '02.

. Tromp J. FC '15.

. Daian P, Eyal I, Juels A, Sirer EG. FC '17.

. Miller A, Juels A, Shi E, Parno B, Katz J. Permacoin. S&P '14.

hashcash
https://en.wikipedia.org/wiki/Proof-of-work_system
Pricing via processing or combatting junk mail
Hashcash - A Denial of Service Counter-Measure
Cuckoo Cycle: a memory bound graph-theoretic proof-of-work
PieceWork: Generalized Outsourcing Control for Proofs of Work
Permacoin: Repurposing bitcoin work for data preservation