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Proof of Work (PoW)
Proof of Work (PoW) is a consensus algorithm that requires network participants (miners) to solve complex mathematical puzzles to validate transactions and create new blocks. The first miner to solve the puzzle gets to add a new block to the blockchain and is rewarded with newly minted cryptocurrency and transaction fees. PoW ensures network security by making it difficult and resource-intensive for any single entity to take control of the network. However, it consumes significant computational power and energy. Example: Bitcoin and Ethereum (before ETH 2.0) use PoW, where miners compete to solve cryptographic puzzles to add blocks to the blockchain.
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