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Definition of PoW
PoW - a consensus mechanism where participants (miners) compete to solve complex mathematical problems to validate transactions and add them to the blockchain
What problem do miners solve in PoW?
Bitcoin miners solve a common hashing problem consisting of the ledger entries and a random number. The first solve the problem wins and send the official next block to other servers.
What are the first blockchain challenge with double-spending?
Double-spend within batch of entries (block): miners only take the first block, reject the second.
What are the second blockchain challenge with double-spending?
double-spend across (block): the first spend has been registered so the second attempt is rejected by the miner.
How does PoW discourage spam participation?
PoW requires lots of energy (the ante for participation), making it costly to participate mining and thus discourage spam participation.
What incentives do miners have to participate in Bitcoin?
The winner receives a fixed amount of new bitcoin plus transaction fees.
Can anyone participate in PoW mining?
Participation is not regulated, anyone can mine.
What is Byzantine Generals Problem?
the situation in which decentralized parties need to agree on a unified courses of action despite the risk of dishonest participants. PoW is the solution to this problem in blockchain
What is Merkle Tree?
the data structured used to effectively summarize and verify large amount of data in the blockchain by collapsing multiple transaction hashes into a single root hash
What is ECDSA?
elliptical curve digital signature algorithm
Definition of block hash
the unique identifier of a block, derived from transaction data and nonce.
Why is PoW important?
solve consensus problem which synchronize ledgers across nodes.
ensure transactions are verified and secure
