What is proof of work (PoW)?

Proof of work (PoW) is a decentralized consensus mechanism that requires massive computing power from a network of people to validate transactions and prevent anybody from cheating the system (for example: spend tokens twice).

Each miner uses their hardware to "mine" with a copy of the distributed ledger, known as the blockchain. This ledger contains all previously validated blocks in the order they were created. Anyone trying to cheat this system by adding a fraudulent block would quickly be rejected by all the other participants holding the legitimate ledger.

This method of validating transactions in cryptocurrency requires a vast amount of energy, so due to environmental concerns, and government pressure, Proof of Stake is becoming more popular.

Find out more on Investopedia.

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