Hey everyone, welcome back to the course. Till now, we have gone through the core concepts of blockchain. We saw how blockchain works and also went through the consensus mechanism. But with the current blockchain ecosystem, we have multiple consensus mechanisms which are trying to solve different problems. In this lecture, we are going to see top five consensus mechanisms. proof of work.

Proof of work is the first one which was introduced back in 2009 with the introduction of Bitcoin proof of work provides us with the probable solution for the Byzantine generals problem. proof of work is a consensus algorithm using which miners try to solve a difficult mathematical problem based on a cryptographic hash algorithm. We have already discussed in detail about proof Work algorithm when we were talking about how blockchain works. proof of work consensus algorithm can be formed in multiple ways. The most famous one is the one in which miners try to guess the nonce value, which is clubbed with the block data and pass through a hashing algorithm to generate the final block signature. miners are aware of the block information, but need to guess the nonce value in such a way that it generates the block hash with some leading zeros as per the difficulty of the blockchain.

If miners can guess the nonce value successfully, they earn a reward in the form of cryptocurrency over the blockchain. In Bitcoin blockchain, the award is 12.5 Bitcoins. There are other mathematical problems which can also form the proof of work consensus mechanism. integer factorization is one of them, where we present a solution of a problem presenting a number in the form of multiplication of two other numbers. proof of work could also be guided to puzzle protocol, which requires a step calculation of hash functions in a defined order. Bitcoin is one of the significant blockchain which is following the proof of work consensus mechanism.

Apart from the reward for solving the block hash over the Bitcoin blockchain miners also received the transaction fees. In this image, you can see how the proof of work algorithm is working. At the top of the image you can view different types of data present within a block. For example, we have mentioned for default items present inside the block transaction details, the signature of the parties hash of the previous block and announce where you which miners try to guess nouns is the only thing unknown value for the miners. The rest of the information is available with them. Once all the data is present for the blog, the nonce value is clubbed with the block data and pass through a hashing algorithm to generate the signature for the blog in such a way that the signature has a certain number of zeros associated with the hash value.

The number of zeros preceding the hash values are calculated as per the difficulty of the blockchain. Once a miner achieves the number of zeros for the hash, as per the difficulty of the blockchain, the block is confirmed over the blockchain. Finally, the miners can announce the block to the other miners so that the other miners can move to the next block. The major blockchain working on the proof of work consensus algorithm is Bitcoin. In Bitcoin blockchain, a new block is added after Every 10 minutes, the difficulty for the chain is adjusted such that the block retains the 10 minutes time interval. If the miners are able to guess the nouns and calculate the block hash in less than 10 minutes, then the difficulty for the blockchain is increased.

And if the miners are taking more than 10 minutes, then the difficulty is accordingly decreased. difficulty in Bitcoin is defined as the hashing rate for the block chain divided by the hashing rate for the target block coming through the miners calculation. This adjustment of the target is made after every 2016 blocks, which means Bitcoin blockchain adjusts itself after every 14 days. Bitcoin blockchain is the pioneer of the concept of proof of work consensus algorithm. And the first blockchain we started the whole phenomena of distributed database proof of work consensus algorithm provided us with a feasible solution for the generalized version of the two general problems, but it still had some major notable drawbacks and limitations. To tackle those drawbacks and limitations, one more significant consensus algorithm came to the market, which is known as proof of stake.

Now, let's go and understand about proof of stake