Proof of work is the original method for securing a blockchain, used by Bitcoin. Participants called miners compete to solve a computationally hard puzzle, and the winner adds the next block of transactions. The "work" — vast amounts of computation — is what makes the ledger trustworthy.
The security comes from cost. To rewrite past transactions an attacker would need to outpace the combined computing power of the entire honest network, which on a large chain is astronomically expensive. Honesty is simply the more profitable strategy.
The well-known drawback is energy consumption, since the whole system depends on doing real, power-hungry computation. That trade-off — proven security at a high energy cost — is the central debate between proof of work and proof of stake.
Worked example
Bitcoin has run on proof of work since 2009, with miners worldwide competing to add each new block.
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Related terms
Frequently asked questions
What does Proof of work mean?
A method of securing a blockchain in which miners expend computing power to validate transactions, used by Bitcoin.
Is Proof of work a crypto or a stock-market term?
It is primarily a cryptocurrency term.
Is this Proof of work definition financial advice?
No. The Market Capitalize glossary is educational — it explains terms and concepts, never a recommendation to buy or sell. See our disclaimer.