Proof of Work Explained.
You might have heard this term thrown around in the #bitcoin space: PoW.
[DAY 5] #21DaysOfBitcoin cc @BitcoinMagEDU #Bitcoin #BitcoinCowries⚡
Proof of Work allows Bitcoin to work without a centralized controller such as the government. It's the key that unlocks the self-sovereign solution we've been looking for — a computer algorithm that just might fix our financial system. #Bitcoin #BitcoinCowries⚡ #21DaysOfBitcoin
Working Selfishly for the Greater Good #21DaysOfBitcoin
Proof of Work is a consensus algorithm that requires its participants — the Bitcoin miners — to expend energy and computational power in order to lock-in batches of new transactions. #Bitcoin #BitcoinCowries⚡
In exchange, they are rewarded with #bitcoin if they are the first to successfully calculate a difficult 64-character hexadecimal serial number (a hash) that identifies the past transaction history, the new transactions, & their own ID as the winning miner. #BitcoinCowries⚡
In other words, miners want this #bitcoin reward for themselves, so they will work tirelessly to try and create a winning solution. The winner then sends their solution and the list of transactions it includes to the blockchain, thus securing those transactions publicly, forever
About every ten minutes, this process repeats itself to help decentralize, secure, and confirm all transactions on the #blockchain while rewarding miners for their proof of work. #Bitcoin
Looking for Diamonds #21DaysOfBitcoin
Diamonds, like bitcoin, are rare. They can't be faked, they're hard to find, and everybody wants one. For the sake of this analogy, we'll just pretend that lab-grown diamonds don't exist. #BitcoinCowries⚡
Mining Pools #21DaysOfBitcoin
In #Bitcoin, miners come together to form mining pools in a similar way. Bitcoin rewards are distributed within a mining pool depending on how much work the miners have done. #BitcoinCowries⚡
Adjusting for Difficulty #21DaysOfBitcoin
As more people realize that there is money to be made looking for diamonds, the overall number of participants increases, which thereby increases the likelihood of someone finding a diamond of the right size quickly. #BitcoinCowries⚡
If there are more people working and it takes less time on average to find the diamonds, then the size requirements for the diamonds get bigger for the next two weeks. #21DaysOfBitcoin #Bitcoin #BitcoinCowries⚡
The #Bitcoin protocol has a built-in difficulty adjustment. Every 2016 blocks (about two weeks), the difficulty to mine bitcoin adjusts as more miners either come online or go offline.
If there is more computational power working to solve the hash, then it becomes more difficult to find a winning solution. If miners come offline e.g. after China banned miners then it becomes easier for miners who are still online to mine bitcoin @BitcoinMagEDU #21DaysOfBitcoin
Kumi Nkansah⚡️Cowrieskumi@8333.mobi
@CowriesKumi
Building @BitcoinCowries⚡️ & @MySatsFarm//⚡️@BitcoinBrite //Journalist // ⚡ #nostr: npub1yyt2uhvjsdfqpfuqe4e9k0ft4cy6ln0z2jv2unvywj49hmhx4tkqw0vz67
