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hashcashproofofwork

Mapper since: February 09, 2013 | Contributor terms: Accepted about 1 year ago

I've chosen my nickname based on https://en.wikipedia.org/wiki/HashCash

Hashcash is a proof-of-work system which is used in Bitcoin to introduce new currency units. Scrypt is also a proof-of-work system which is used in Litecoin to introduce new currency units. Though since Bitcoin was introduced first it has existed for the longest amount of time, thus I used HashCash since that is what Bitcoin uses in it's currency system.

The way HashCash is used in Bitcoin is that people let their hardware compute puzzles based on SHA-256 which can't be predictably calculated, thus forcing oneself to use statistics to determine the level of difficulty to find a certain puzzle. After a puzzle is found that is proof to the entire Bitcoin P2P network that the machine can now include as many current transactions as available in what is called a block. The creator of the block also gains all the transaction fees plus depending on the block value number, what that is worth, according to the Bitcoin algorithm.