Proof-of-work system - Definition from the Hotspot Shield Encyclopedia

The Proof of Work system is a main system that is used in the mining process of digital currencies.

The proof of work scheme involves solving computational puzzles or pricing functions to gain a reward and to prove that the workd has been completed. There are two different variations of the proof of work protocol which are the Challenge-response (the provider picks a challenge, and the responder has to match that challenge, once the response if verified, the reward is given), and the Solution-verification method (the responder choose the problem and solves it, and the provider has to verify the problem chosen, and the solution before giving a reward). Many cryptocurrencies use the proof of work method with Bitcoin being the first and main adapter of this technology.