Consensus - Proof of Work
The Proof of Work Consensus
by Crypto Nation – 17 June 2020
In a public blockchain, a consensus algorithm makes it possible to designate which block is added to the blockchain at a time T and thus apply the “truth” of this blockchain. Any computer connected to the network can create transaction blocks. The consensus is therefore there to apply a process making it possible to determine for each block, the one and only participant who will add it to the chain, because it must be unique.
The Proof of Work consensus (PoW) is the best known of the blockchain algorithms, it is also the oldest, since Bitcoin is based on this consensus.
The principle of PoW is to require machines on the network (miners) to perform a certain task. It consists of solving a very complex mathematical problem whose solution can only be found by chance. The first machine to find the right result will be able to add the new block to the chain. The miners will then be able to receive a remuneration of a certain amount of Bitcoin, with each new block.
But we must be aware of the great problem of Proof of Work. It generates enormous energy expenses, because the miners are racing each others with the power of calculation, in order to be able to solve the mathematical problem before the others, and thus pocket the rewards.
The only real known flaw in Proof of Work is named Attack 51. It consists of holding at least 51% of the mining power. Thus attackers will be able to control part of the events on the blockchain network. They will be able to generate new blocks without competition, and validate the transactions themselves. But this attack is not profitable on Bitcoin. It would take too much power to hold 51% of the computing power. Even if this would happen, when the new block is added, the network will expose this compromise to all users, who would flee, and thus directly lower the price.