The bridge between physical and digital

The term proof-of-work is often interpreted as “computers doing math”. While this description is not incorrect, it does not fully capture the power of proof-of-work. Proof-of-work provides a bridge between the physical and the digital world.

Block as a representation for work done

Proof-of-work is not about choosing a lucky winning miner to receive freshly created bitcoins; this piece of proof-of-work, while essential, only serves as motivation for miners to deliver the work. If they are not paid, then no work will be done.

The actual function of proof-of-work is to convert electricity into a digital block as part of the blockchain. Miners continuously perform hash operations until they solve the cryptographic puzzle that serves as a lottery for the miners. All the operations they perform, all the work they do, no longer matter once the solution is found.

A hash function is an algorithm that, given a certain input, generates a unique output. It is not possible to calculate back what the input was from the generated output, but it is possible, given the input, to check that the previously displayed output is correct by running the algorithm again with the input.

That one solution is representative of the enormous amount of energy that was required to produce this solution. This is the “proof” of the work that has been done: proof-of-work. This solution is converted into a block and added to the blockchain, which would require an attacker to do the same amount of work to successfully counterfeit the solution. This hardens the transaction history added to the blockchain; almost as if it were written in stone.

Digital yet physical

When we receive a digital file from someone, it doesn’t ‘feel’ the same as when we receive a cash coin. When we receive a cash coin, for example a euro, we know for sure that value has been transferred from the counterparty to us; we are sure that the counterparty no longer has that value in any case.

The enormous amount of energy delivered and presented by that one solution, one that can be verified with very little energy, gives us this same certainty. This accumulation of energy consumed indicates how difficult it is to counterfeit the transfer of value between two parties, where it is so easy to do so when sending an ordinary digital file.

Receiving bitcoins ‘feels’ and is therefore just as physical, if not more physical, as receiving a cash coin. The bitcoin transaction we received is not forgeable. This tamperproofness is captured by the series of linked solutions, each representing the practically impossible task of calculating faster than all miners put together. Proof-of-work means that our digital bitcoins have properties that we normally only see in the physical world. It is the bridge between physical and digital.

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