PoW Chains

Proof of Work (PoW) chains use a competitive validation method to confirm transactions and add new blocks to the blockchain. The validation method involves difficult math problem to verify digital transactions.

This problem is called a client puzzle. Hashcash, first proposed in 1997 by Adam Back. Hashcash paved the way for blockchains utilizing a proof-of-work function.

In order to create a new hash, a miner must solve the puzzle. The first miner to hit the lowest target nonce 'solves' the problem. This miner creates the new block by hashing together the most recent block with the newest one— the miner who solves the block receives a reward in the form of newly 'minted' coins.

Proof-of-work is the mechanism that allows a blockchain to reach consensus. Consensus allows a blockchain to keep track of things like account balances and transaction order. This prevents coins from getting 'double spent' and ensures that a proof-of-work chain is incredibly difficult to attack or manipulate.

To attack a PoW chain, attackers need to control 51% or more of the network power. This allows miners to collude with greater power than the remainder. (49%)

The 'attackers' force a change by adjusting the chain. The other miners can fight back which will result in a hardfork of the chain.

A hardfork occurs when the consensus is violated

Two groups of miners want to continue the history of their 'version' by enforcing the new consensus. A different consensus may occur when heavily contested code changes or software updates fundamentally change the functionality of the chain.