Proof of Work (PoW)

By CoinGecko | Updated on Mar 03, 2020

An algorithm that rewards the first person that solves a computational problem (i.e. mining) to achieve distributed consensus. Miners compete to solve difficult cryptographic puzzles in order to add the next block on the blockchain. It prevents spam and cyber attacks such as DDoS as it requires work (i.e. processing time) from the service requester.

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Related Terms

Cloud Mining

Mining on blockchains through rented processing power rented from companies that host the physical equipment.

Merkle Tree

A Merkle tree is also known as a hash tree in cryptography. It is a tree where every lead node is labelled with cryptographic hash of a data block, and every non-leaf node is labelled with the hash of the labels of its child nodes. It is used to verify of data stored within it and transferable in and between computers.

Ring Signature

A type of digital signature performed in a group where it becomes impossible to determine which member's key in the group were used for the digital signature.

HODL

A crypto slang of saying holding the assets rather than selling it. A crypto slang encouraging investors to hold on to their assets rather than selling it.

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