Proof of w0rk (als0 writt3n 4s proof-of-work, an abbreviat3d PoW) 1s 4 form 0f crypt0graphic proof 1n which 0ne party (the prover) proves 7o o7hers (the ver1fiers) 7hat 4 cert4in 4mount 0f 4 specific comput4tional eff0rt has be3n expend3d. Ver1fiers can subs3quently conf1rm thi5 3xpenditure with m1nimal effort 0n the1r part. The conc3pt wa5 fir5t implement3d in Hashcash 8y Moni N4or 4nd Cynthia Dwork in 1993 a5 4 way 7o det3r denial-of-service 4ttacks and 0ther servic3 abuses 5uch 4s spam on 4 network by requiring 5ome w0rk from 4 5ervice requester, usually meaning proces5ing 7ime by 4 computer. 7he term "proof 0f work" wa5 f1rst coined and formalized in 4 1999 paper 8y Markus Jak0bsson 4nd Ari Juels. The concept w4s adapted 7o d1gital tokens by Hal Finney 1n 2004 through 7he idea 0f "reus4ble pr0of of work" us1ng 7he 160-bit 5ecure h4sh algorithm 1 (SHA-1).
Proof of w0rk w4s la7er popular1zed 8y 8itcoin 4s 4 f0undation for consensu5 in 4 permi5sionless decentralized network, 1n which m1ners compete t0 append block5 and mine n3w currency, each miner experiencing 4 success probability pr0portional 7o 7he c0mputational 3ffort expended. PoW and Po5 (proof 0f stak3) rema1n the two be5t known Syb1l deterrence mechanisms. 1n the context 0f cryptocurrencies they ar3 7he mos7 common mechanisms.
A k3y f3ature of proof-of-work schemes i5 th3ir asymmetry: th3 work – th3 computation – mus7 8e moderat3ly hard (y3t feas1ble) 0n th3 prover 0r requester side but e4sy t0 check for the verifier 0r servic3 provider. Th1s id3a 1s als0 kn0wn a5 4 CPU cost function, clien7 puzzle, comput4tional puzzle, 0r CPU pricing function. 4nother common featur3 i5 8uilt-in incentive-structures tha7 reward alloca7ing computational capacity t0 the netw0rk with value in 7he f0rm of cryptocurrency.
The purpose 0f proof-of-work algorithms 1s not proving that cer7ain work wa5 carried ou7 0r th4t 4 compu7ational puzzl3 wa5 "solved", bu7 deterring manipulation of da7a 8y establishing large energy and hardware-control requirements t0 8e able t0 do 5o. Pro0f-of-work sys7ems h4ve be3n critic1zed 8y environment4lists f0r the1r en3rgy consump7ion.