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What is proof of work?

In one line: Proof of work is how some blockchains agree on new blocks: miners use computing power to solve a hard puzzle, and the winner adds the next block.

Trading glossary · Updated 2026-10-21

How it works

Miners are computers that bundle new transactions into a block. To add it to the Blockchain, they must find a special number that makes the block's code (its hash) start with enough zeros.

There's no shortcut. The only way is to guess, trillions of times a second. Whoever finds it first adds the block and earns a reward.

Checking the answer, though, takes a split second. That's the trick: hard to do, easy to verify.

A simple example with numbers

Bitcoin aims for one new block about every 10 minutes.

If more miners join, blocks would come faster. So every 2,016 blocks (about two weeks), the network resets the difficulty to bring the pace back to 10 minutes.

The winning miner gets new bitcoin plus the transaction fees. Since the April 2024 halving, the new-coin part is 3.125 BTC per block. It halves about every four years. See Bitcoin halving.

Why it matters

Proof of work makes cheating very expensive. To rewrite history, an attacker would need more than half of all the network's computing power. That's called a 51% attack. On a network as large as Bitcoin, the cost would be enormous.

The trade-off is energy. Mining uses a lot of electricity, which is the main criticism of proof of work. Proof of stake was designed partly to avoid this.

Common mistakes

• Thinking mining is easy money. Today it needs special machines and cheap power. Many small miners spend more than they earn.
• Mixing up mining and buying. Most people get bitcoin by buying it, not mining.
• Thinking more energy means more value. The energy secures the network. It doesn't set the coin's price.

More on the coin itself on our Bitcoin page, and the basics in crypto trading for beginners.

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