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What Is Proof of Work (PoW) in Crypto?

By Lyle Daly – Updated Oct 13, 2025 at 8:14 PM EST

Key Points

Proof of work validates transactions on a blockchain by miners solving hash puzzles.
Bitcoin uses proof of work, rewarding miners with coins for adding blocks.
Proof of stake offers a less energy-intensive alternative to proof of work.

Decentralization was a key part of the original vision for cryptocurrencies. To accomplish that, there needed to be a way to confirm transactions without the involvement of financial institutions. The first solution to this challenge was called proof of work.

Proof of work (PoW) is a form of adding new blocks of transactions to a cryptocurrency's blockchain. The work, in this case, is generating a hash (a long string of characters) that matches the target hash for the current block. The crypto miner who does this wins the right to add that block to the blockchain and receive rewards.

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A graphic explaining how proof of work is a method of adding new blocks of transactions to a cryptocurrency’s blockchain. — Image Source: The Motley Fool

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Cryptocurrency started with proof of work since it's the consensus mechanism used by the first cryptocurrency, Bitcoin (BTC -2.88%). It's well-known for its security but also for inefficiency and a heavy environmental impact.

By understanding proof of work, you'll have a better understanding of the coins that use it. This can also help you choose where to put your money when investing in crypto. Keep reading for a full explanation of proof of work.

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Proof of Stake (PoS)

The proof of stake (PoS) model is one that maintains integrity in a blockchain and rewards folks who verify transactions differently.

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Chart by author.
Pros	Cons
High level of security.	Inefficient with slow transaction speeds and expensive fees.
Provides a decentralized method of verifying transactions.	High energy usage.
Allows miners to earn crypto rewards.	Mining often requires expensive equipment.

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About the Author

Lyle Daly is a contributing Motley Fool stock market analyst covering information technology and cryptocurrency. Lyle has been a contributor at the financial services company since 2018. His work has been featured on USA Today, Yahoo Finance, MSN, Fox Business, and Nasdaq. Before joining The Motley Fool, he wrote for financial brands including Intuit.

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@LyleDaly

Lyle Daly has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.