Enter Proof-of-Work 

Proof-of-Work is the second half of blockchain technology that, combined with cryptographic hash functions, ensured that the Bitcoin blockchains is secure. 

Essentially, proof-of-work is a mechanism that slows down the creation of new blocks by requiring work/effort be exerted before a block is produced. Proof of Work require a mathematical puzzle to be solved or computed for every new block added to the chain.

The puzzle itself is arbitrary, but the requirement to perform sufficient ‘work’ – burning electrical energy – is a way of discouraging people from trying to mess up the blockchain; you’d have to spend/exert more effort than could be justified by doing it.

This proof-of-work process is regulated to ensure blocks are created at an average time-period called the block time. For Bitcoin’s it takes around 10 minutes to create a new block, which as discussed in our article on Bitcoin’s limitations, is a measure impediment to scaling.

10 minutes
The average confirmation time for a new block to be 
added to the Bitcoin blockchain.

There is a reward for whoever solves the problem to incentivise it to happen. As we’ve already seen in Bitcoin’s case, the reward is currently set at 6.25 Bitcoins and will be until at least 2024 (known as Halving). 

This mechanism means there is an economic incentive for Miners to add new blocks  by  contributing the required level of work. It also stops computers just generating a bunch of new hashes and verifying a chain with incorrect data in the blocks. 

Bitcoin uses Proof-of-Work as its consensus mechanism but there are many others, the most popular being Proof-of-Stake (PoS) and Delegated-Proof-of-Stake (DPoS).

These mechanisms are slightly more complicated and are aiming to be a more efficient way of making blockchains reliably secure but without the requirement for the work, which essentially comes down to computing power and energy consumption. They are in effect attempts to solve the Blockchain Trilemma – delivering scalability, security and decentralisation.

PoS is essentially having skin in the game by putting up funds to participate, while DPoS is the same, except you can delegate the authority your stake gives over the blockchain consensus to some other participant.