Distributed Consensus — Proof-of-Work

Proof-Of-Work is the name of a cryptographic algorithm that is used for some blockchains when new blocks are to be appended to the chain.

Let’s take a higher-level look at how this one works, shall we?

The Basics

This algorithm creates a system in which one party (the prover) has to prove to one or multiple other parties (the verifiers) that they put in a certain amount of work for some purpose.

The work the prover has to put in is moderately hard to very hard, while the verifiers can pretty easily check whether the proof is correct. This creates an asymmetric system.

The original idea was to create protection against DDoS attacks and spam. If someone sending a request to a service would have to put in a lot of work to get an answer, it would be very costly to send a multitude of requests or require a disproportionate amount of hardware resources.

Variants

Two variants of Proof-Of-Work algorithms exist:

1. Challenge-response
2. Solution-verification

Challenge-response

This variant can be used when there is a direct link between the prover and the verifier. When the prover sends a request, the verifier chooses…