Proof-of-Work (PoW)

In a PoW system, miners compete to solve complex mathematical problems using computational power. The first miner to solve the problem and validate the transaction is rewarded with new units of the cryptocurrency as well as transaction fees.

The difficulty of the mathematical problem that needs to be solved is adjusted automatically based on the total computational power of the network, ensuring that new blocks are created at a constant rate.

PoW systems provide a high level of security because they require a significant amount of computational power to validate transactions and create new blocks. However, they are also energy-intensive and require specialized hardware, which can lead to centralization.