Blockchain consensus mechanisms. Proof of Work

3 min readNov 9, 2021

Differences of Proof of Stake, Proof of Work, or Proof of History? (part 1).

When developing a new crypto project, it always comes to choosing fundamentals that are going to determine the way the whole project functions.

⚙️ What are these algorithms?

Different Blockchain technologies use different consensus mechanisms so-called “proofs” like Proof of Stake, Proof of Work, Proof of History in order to safely conduct and verify transactions on a blockchain ledger. The right consensus mechanism for blockchain technology is also responsible for managing the mining process of the new blocks for its supply. Along with the blockchain ledger, these algorithms are the core of all cryptocurrencies. And Blockchain technology is not possible without any of those consensus mechanisms.

🔒 What are the differences?

Proof of Work (PoW)

⚒ The very first adoption of this algorithm was implemented in Bitcoin. In order to mine the new subsequent blocks after the genesis block on a blockchain (block 0, an initial hardcoded block, that doesn’t refer to previous blocks) Proof of Work, forces a miner to compete with other miners for a chance of solving hash-puzzles that expend a lot of computing energy. That is needed to proffer new blocks that meet the requirements of a blockchain network to be verified.

Nodes (blockchain participants) within a blockchain can verify transactions using Proof of Work in order to eliminate a double transaction record.

💎 Proof of Work requires a lot of computing energy and electrical power, due to hardware solving hash-puzzles process. Eventually, every correct solution that is represented by a miner gets verified by other miners and blockchain participants. So a particular block can be added to a chain, and so, that miner can be rewarded with a block.

You certainly know the prominent cryptocurrencies that are using this consensus mechanism. Among those are Bitcoin, Bitcoin Cash, Ethereum Litecoin. However, they use different cryptographic hash functions.

🔓 Downsides?

The evolution of blockchain has proven that Proof of Work is no longer a reasonable consensus mechanism for cryptocurrency projects. Mining and verification take way too long time, and there is no alternative to managing these issues. Furthermore, there is no way of penalizing the fake actors (vicious validators), since that PoW offers weaker security for the whole blockchain that is using this type of mechanism. Still though, trying to forge or attack the network leads to power overconsumption for a potential hacker.

As blockchain developers, we’ve noticed that fewer projects decide to use PoW. In our experience of implementing a whole blockchain for Ducatus Global, we decided to stick along with Proof of Authority and Proof of Stake for DUC and DUCX (Ducatus native coins) consequently.

We would like to expand this topic a bit more, so stay tuned for our posts!