4 Proof Of Work Examples

John Spacey, updated on January 15, 2023

Proof of work is an information security technique that requires computational work to be done in order for a transaction or request to be valid. This technique relies on mathematical problems that require a reasonably predictable amount of processing cycles to complete. The idea is to slow requests down to improve security. The following are illustrative examples.

Email

Email spam is a significant problem because email technology allows emails to be sent at very high speed with little work. An ordinary computer can potentially send millions of individual emails a day. Requiring email senders to complete a mathematical problem with each email could introduce a average processing cost such as $0.001 that discourages people from sending emails in bulk.

Distributed Denial of Service Attacks

A distributed denial of service attack is the use of many computers to flood a service such as a website with enough requests to render it unavailable. Such attacks send requests at high speed without bothering to wait for a response. Network protocols could theoretically support proof-of-work requests that could be used to slow attacks.

High Frequency Traders

If a stock exchange wanted to slow down high frequency trading algorithms they could force them to complete proof-of-work tasks. Human traders might be able to bypass such requirements with user authentication techniques. This could theoretically reduce algorithms to human speed in executing trades, if that was the goal of a particular exchange.

Cryptocurrency

Cryptocurrencies may use proof-of-work to mine new currency. In order for the currency to be valuable, this needs to be hard to do. Math problems for mining currency may require quintillions of processing loops to mine a single unit of currency. This consumes a great deal of electricity and other resources such as CPUs and land. If all the world's currency was mined like this it may have a significant environmental impact.

Overview: Proof Of Work
Type	Information Security
Definition (1)	Requiring a solution to a mathematical problem in order to complete a valid request or transaction.
Definition (2)	An information security technique that requires requests to show evidence of having completed a task of predictable complexity.
Definition (3)	Slowing technology down by requiring mathematical problems to be solved.
Related Concepts	Information Security Deep Magic Defense In Depth