Foundations of Blockchain

How does Proof of Work use cryptography?

Proof of Work is a consensus algorithm that uses a cryptographic hashing puzzle to make sure that a certain amount of work has been done before a block is created. Bitcoin's Proof of Work uses the SHA-256 hash function to create a hashing puzzle.

Blocks in a blockchain network are created by a special type of validator node called a miner. These miner nodes compete with each other to solve the hashing puzzle in order to produce a block to be appended to the ledger.

Blockchain miners will start to solve the hashing puzzle whenever they have data (often, a set of transactions) that needs to be included in a block. The following Figure 3.2 shows the basic structure of a block header used in a Proof of ...