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WHAT: Proof of Found Work (PoW) is the SHA-256 based consensus algorithm of the Bitcoin network which borrowed from Adam Back’s original Hashcash Proof of Work. Its’ fundamental characteristic is that a piece of data is difficult to produce but easy for others to verify.

WHY: Proof of Work provides security by making attacks expensive, because an attacker has to outspend the honest actors to subvert the network. PoW verification solved the trust amongst untrusted parties problem commonly known as the Byzantine Generals’ Problem“.

It is also called “Proof of Found Work” because other nodes add new blocks to a found chain by solving a cryptographic puzzle (aka a nonce). Miners compete against each other to solve blocks so, they must agree to settle these solved blocks amongst themselves.

At present a Miner’s main incentive is to receive block rewards in bitcoin for their effort, but these rewards are halved every four years; so new incentives such as transaction fees will eventually take its’ place.

REFERENCES:
https://en.bitcoin.it/wiki/Hashcash
https://en.bitcoin.it/wiki/Proof_of_work
https://cointelegraph.com/explained/proof-of-work-explained
https://medium.com/coinmonks/bitcoin-security-in-one-chart-694ee3ed8c2d
https://medium.com/@rajshetgar/blockchain-proof-of-work-pow-in-bitcoin-34de270ac4c5

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