Proof of work [Bitcoin]

A proof of work system is needed to operate a distributed timestamp server.

Bitcoin achieves proof of work with hash puzzles: The node that creates (proposes) a block must find a nonce such that the hash of nonce+previous hash+tx₁+tx₂…+txش is smaller than a target value.

Such puzzles are solved by miners.

By increasing and decreasing the difficulty to solve a specific problem, the proof of work mechanism can compensate for available (and increasing) CPU power.

An alternative to proof of work is proof of stake.