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Proof of work (PoW)
How it works

Proof of work (PoW)

A way of establishing trust through effort. To participate, you have to do real work. The more work the network requires, the harder it is for anyone to alter records dishonestly. Used by Bitcoin. Most institutional blockchain applications do not use this method.

TradFi equivalent
In traditional finance...
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TradFi equivalent
A performance bond. Before a contractor is trusted to build, they put money at risk. If they don't deliver, they lose it. Proof of work operates on the same principle, except what's at stake is effort and energy, not money.
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Analogy
In everyday terms...
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Analogy
Earning a professional license. Before you are trusted to practice, you have to demonstrate real effort through exams, training, and hours logged. The effort required is what makes the credential mean something.
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