Overview: Imagine giving someone a padlock and telling them to solve it by random guessing – pretty difficult. But once they find the code, it’s easy to verify: just plug it in and see if it works. Miners in the network solve cryptographic puzzles that are extremely difficult to solve but trivially easy to verify. Transactions are packaged into these cryptographic puzzles in blocks. Once a miner solves a block, their work is proof that they put in the energy necessary to find the solution.
Strengths: PoW has consistently proven to be the most secure consensus mechanism. Energy always has a cost, and PoW is the only consensus mechanism that takes from the physical world and translates it into its technology.
Criticisms: PoW requires enormous energy expenditure, at about 0.33 percent (Bitcoin’s expenditure) of the world’s energy consumption. Some critics say that there is a gross mismatch between its energy expenditure and value added to society. As mining grows more difficult, critics say, only those with ample funding will be able to continue, leading to a likelihood of increased miner centralization.
Popular Coins that Use: Bitcoin, Ethereum Classic, Litecoin, Dash, Monero, Zcash, Ethereum (will switch to PoS).