Many unfamiliar with blockchain tend to equate blockchain with Bitcoin, thinking that they are essentially the same, but this view is obviously biased. The role and significance of blockchain is more like the internet, a general term, while Bitcoin is the most successful and important app within it.

But one thing we cannot deny: Bitcoin is where blockchain began. And Bitcoin's consensus mechanism, Proof of Work (POW), also pioneered a new model, with numerous POW tokens achieving computing power and value in the crypto world. So today, let's talk about POW tokens together.

What is the value of the POW consensus mechanism? What are its core advantages?

The POW consensus mechanism, full name Proof of Work, was established with Bitcoin by Satoshi Nakamoto. Its appearance is mainly to solve the consensus problem to ensure the validity and reliability of data. POW requires node hosts to solve a complex mathematical calculation and publish the record on the network as evidence. If the solution successfully meets all expectations about the solution, the node can receive some token rewards and be recognized by the network. It is worth mentioning that POW requires attackers to first split the network's computing power, as solving mathematical calculations requires a lot of time and computing power, making such attacks very difficult. Therefore, the POW model can effectively prevent organized malicious attacks.

For distributed ledgers, POW provides data validity assurance and achieves decentralization, ensuring security in large networks. Typically, blocks in the network are verified based on mathematical calculations, making the original data more secure because the data can only be recognized when the calculation meets specific requirements.

The disadvantages are also obvious! What challenges do POW tokens currently face?

High security, data assurance, and decentralization are all undeniable advantages of POW. However, to achieve these core advantages, the POW consensus mechanism also incurs corresponding costs.

First, POW consumes a huge amount of energy. As mentioned earlier, POW requires host nodes to solve complex mathematical calculations. These high-difficulty algorithms require a large amount of computing power to support, leading to significant energy consumption. What impact will this high energy consumption have on the environment? Is it sustainable? These are questions we need to consider in the future.

Second, the POW mechanism has extremely high hardware requirements. For a POW token to be mined, it requires specialized hardware equipment, which has a high entry barrier. This high barrier is not very friendly to ordinary investors and general users.

It is also worth noting that although POW aims to build a high-end "who has the right to prove" system, there is a hidden danger behind it: once an entity controls more than 51% of the computing power, it is possible to attack the network, which is a major risk.

Key point! What are the prominent POW projects in the current market?

As POW becomes increasingly mainstream, POW tokens in the market are emerging like mushrooms. Next, let's take stock of the prominent POW projects in the market this year.

Kaspa

Kaspa is a POW public chain built based on the GHOSTDAG protocol. Compared to Bitcoin, Kaspa has a significant feature, which is a change in the structure pattern of the blockchain. Bitcoin adopts a single-chain structure, while GHOSTDAG adopts a directed acyclic graph (DAG) structure, where one block can point to multiple blocks.

Kaspa's KAS token was launched in November 2021, with a total supply of 28.7 billion and a circulation of 19.8 billion, accounting for 69% of the total supply. Its market value has reached $750 million, and its fully diluted valuation (FDV) has reached $1.08 billion. Since its launch, the KAS token has risen several hundred times. This achievement is closely related to Kaspa's strong development team and solid foundation. Currently, KAS token has a high market value ( $750 million), ranking around 60th globally.

However, investors need to be aware that while the future of KAS token looks promising, there is significant potential selling pressure. Early miners hold a large number of low-priced chips, and new chips are produced daily. If these chips are sold, it will have a huge impact on the price.

DNX

DNX coin is a virtual currency created by DNX Capital, which has built a decentralized financial ecosystem. The goal of DNX coin is to create a powerful platform for managing smart contracts and decentralized financial services.

The technical features of DNX coin include smart contracts, on-chain governance, and anonymous transactions. Smart contracts are the core of DNX coin, providing developers with a fast and efficient way to build blockchain-based applications. In addition, DNX coin provides a decentralized financial platform, offering users reinsurance, microinsurance, P2P loans, and other financial services.

DNX coin has recently shown impressive performance and has become a hot new star, especially as it also has the advantage of "resisting ASIC mining," which other coins do not have. However, we would like to remind everyone that DNX's future business scope will involve microinsurance, P2P, and other areas, which may raise some suspicions of "gray industry." Before investing, it is important to conduct thorough research and analysis.

The future development of POW, where will it go?

Since the appearance of Bitcoin, POW has been in everyone's sight for a full 14 years.

Because it has been in the industry for too long, it has become the air and water of the industry, and is an existence that everyone is familiar with. Perhaps because the starting point of POW is too high, subsequent performances rarely impress, giving a feeling of "peaking at debut."

However, there has always been a consensus in the industry regarding POW, that is, "bear market looks at POW." This means that in bear market conditions, when various problems arise in the industry and various methods fail, POW will once again enter the mainstream view and become the focus of attention.

After all, in a downturn, most of the funds will withdraw from narrative-driven targets (simply put, projects that are famous only for telling a good story without solid technical support), and the remaining funds will become more practical, converging on targets with objective value assessment standards, and projects related to POW will benefit from this.

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