Question

How does Bitcoin's Proof of Work consensus algorithm work? please explain in detail but also simply to understand.

Answer 1

Proof of Work algorithm typically works in blockchain. We use this algorithm for confirming a set of transactions that have occurred and to add new blocks to the chain.

As and when a user sends a token which is digital, all the data related to transaction gets gathered into the decentralized ledger. So, for this purpose we have to make sure the utmost supervision for the confirming the transactions is provided and the blocks are arranged in a proper manner.

Proof of Work basically deals with a heavy computer calculation process which is otherwise called as mining. Whenever the miner who solves the problems of each block and successfully performs the calculation, he gets rewarded. So, all the miners who are present in a network compete among each other for solving a problem and getting the solution for it.

Miners try and solve the puzzle, confirm the set of transactions and then form a new block. Whenever a miner successfully manages to get a solution for a puzzle, it results in the formation of a new block. After this step, all the transactions are gathered and kept in this block and are considered to be confirmed.

The process of having a block getting accepted is by guessing either the NONCE or pseudo random number that has been generated by a network to get solved in a limited amount of time

Proof of Work makes it really difficult to manipulate any point in the blockchain, as doing so may require to change all re-mine all the previous blocks