What is PoW used for?
PoW (Proof of Work) is the first and most well-known consensus algorithm used in the Bitcoin blockchain. The main idea of PoW is that network participants (miners) solve complex mathematical problems to add a new block to the blockchain.
This process requires significant computational resources.
Key purposes and functions of PoW:
🔵 Security: By utilizing computational resources, PoW ensures network security, making it extremely difficult and expensive for attackers to compromise the network (e.g., through a 51% attack).
🔵 Decentralization: PoW allows many participants to engage in the process of validating transactions, making the network more decentralized.
🔵 Creation of new coins: Miners who solve PoW problems are rewarded with new coins (such as Bitcoin), incentivizing their participation in supporting the network.
