what is the term for a consensus mechanism that requires users to solve complex puzzles?
The term for a consensus mechanism that requires users to solve complex puzzles is Proof-of-Work (PoW).
Proof-of-Work is a consensus algorithm that is commonly used in blockchain technology, most notably in cryptocurrencies like Bitcoin. In this mechanism, users, also known as miners, compete against each other to solve complex mathematical puzzles in order to validate and add new blocks to the blockchain.
The puzzles require a significant amount of computational power to solve, and the difficulty level is adjusted to ensure a consistent block creation rate. Miners expend computational resources, such as electricity and processing power, to compete for the chance to add the next block to the blockchain.
Once a miner successfully solves a puzzle, they can propose a new block containing a valid set of transactions. This proposal is then verified by other participants on the network, who independently validate the solution. If the solution is deemed valid, the new block is added to the blockchain and the miner is rewarded with a certain amount of cryptocurrency.
Proof-of-Work is designed to be resource-intensive and time-consuming, making it difficult for malicious actors to manipulate the system. The concept of computational puzzles acts as a barrier against potential attacks, as it is computationally infeasible to solve these puzzles without investing a significant amount of computational power.
While Proof-of-Work has been widely adopted and proven to be secure, it also has drawbacks such as high energy consumption and the possibility of centralization of mining power. As a result, alternative consensus mechanisms like Proof-of-Stake (PoS) have emerged to address these issues.