In-depth analysis of computing power and value in the POW token encryption world

Regarding POW, there is always a consensus in the industry that "in a bear market, look at POW". This means that in a bear market, when various problems arise in the industry and various methods fail, POW will once again enter the mainstream vision and become the focus of everyone's attention.

Many people who are not familiar with blockchain will equate blockchain with Bitcoin, thinking that the two are essentially the same. This view is obviously biased. The role and significance of blockchain is more like the Internet, a general term, and Bitcoin is the most successful and important APP among them.

But there is one thing we cannot deny: Bitcoin is where the blockchain started. And Bitcoin's consensus mechanism, POW proof of work, has also created a new model. Countless POW tokens use this as a benchmark to achieve computing power and value in the crypto world. So today, let's talk about POW tokens.

What is the POW consensus mechanism worth? What are its core advantages?

The POW consensus mechanism, full name Proof of Work, is the proof of work established by Satoshi Nakamoto along with Bitcoin. It was created mainly to solve the consensus problem to ensure the validity and reliability of data. POW requires the node host to solve a complex mathematical calculation and publish the record as evidence on the network. If the solution successfully meets all expectations about the solution, the node can get some token rewards and can be recognized by the network. It is worth mentioning that POW requires attackers to split the computing power of the network first, because solving mathematical calculations requires a lot of time and computing power, and the computing power of the network increases with the use of the system, so such attacks are very difficult. For this reason, the POW model can effectively prevent organized malicious attacks.

For distributed ledgers, POW provides data validity guarantees and achieves decentralization, which can achieve security in large networks. Usually, blocks in the network are verified based on mathematical calculations, which makes the original data more secure because data can only be recognized if the calculation meets specific requirements.

The disadvantages are equally obvious! What challenges does POW token currently face?

High security, high data assurance, and the ability to achieve decentralization... these are advantages of POW that cannot be ignored. However, in order to achieve these core advantages, the POW consensus mechanism also pays a corresponding price.

First of all, POW consumes a lot of energy. As mentioned earlier, POW requires the host node to solve complex mathematical calculations. These difficult algorithms must be supported by a lot of computing power, otherwise the proof of work cannot be completed. This will inevitably lead to huge energy consumption. How much impact will this high energy consumption have on the environment? Is it sustainable? These are all questions we need to think about later.

Secondly, the POW mechanism has extremely high requirements for hardware. If a POW token wants to be mined, it needs to be equipped with special hardware equipment, which has a high investment threshold. This high threshold is not very friendly to ordinary investors and general users.

What is more worth mentioning is that although POW is intended to build a high-end situation of "whoever has the power can prove it", there is a hidden danger behind it: once an entity has more than 51% of the computing power, it is possible to attack the network, which will be a huge hidden danger.

Key points! What are the dazzling POW projects in the current market?

POW is becoming more and more mainstream, and POW tokens on the market are popping up like mushrooms after rain. Next, let's take stock of the POW projects that have attracted much attention in the market this year.

Kaspa

Kaspa is a POW public chain built on the GHOSTDAG protocol. Compared with Bitcoin, Kapa has an obvious feature, which is to change the structural mode of the blockchain. Bitcoin uses a single chain structure, while GHOSTDAG uses a directed acyclic graph (DAG) structure: one block can point to multiple blocks.

Kaspa's KAS coin was launched in November 2021, with a total supply of 28.7 billion, a circulation of 19.8 billion, a circulation share of 69%, a market value of US$750 million, and a FDV (full circulation market value) of US$1.08 billion. Since its launch, the KAS coin has risen hundreds of times. Such achievements are inseparable from the fact that Kaspa itself has a strong development team and a solid foundation. At present, the market value of the KAS coin is relatively high (US$750 million), ranking around 60th in the world.

However, investors should also note that although the prospects of KAS coin are good, the potential selling pressure is relatively high. Early miners hold a large number of low-priced chips, and new chips are produced every day. If these chips are sold, it will have a huge impact on the price.

DNX

DNX is a virtual currency created by DNX Capital, which builds a decentralized financial ecosystem. The goal of DNX is to create a powerful service platform for managing smart contracts and decentralized finance.

The technical features of DNX coin include smart contracts, on-chain governance and anonymous transactions. Among them, smart contracts are the core of DNX coin, which provides developers with a fast and efficient way to build blockchain-based applications. In addition, DNX coin also provides a decentralized financial platform to provide users with financial services such as reinsurance, micro-insurance, P2P loans, etc.

DNX has performed well recently and has become a hot new star, especially because it has the advantage of "resisting ASIC mining", which other currencies do not have. But we still want to remind you that DNX's future business scope will involve micro-insurance, P2P and other aspects, which may be suspected of being designed as a "gray industry". You should still do more research, study and calculation before investing.

Where will the future development of POW go?

From the moment Bitcoin appeared, POW has entered everyone's field of vision, and it has been 14 years now.

Because it has been in the industry for so long, it has become the air and water of the industry, and everyone is familiar with it. Perhaps because POW's starting point is too high, its subsequent performance rarely makes people shine, giving people a sense of "peaking at debut".

However, there is always a consensus in the industry about POW, that is, "Look at POW in a bear market." This means that in a bear market, when various problems arise in the industry and various methods fail, POW will once again enter the mainstream vision and become the focus of everyone's attention.

After all, in times of recession, major funds will withdraw from targets that rely solely on narrative drive (to put it simply, those projects that have no solid technical support and are only famous for telling a good story), and the remaining funds will become more pragmatic and will gather on targets with objective value assessment standards, and POW-related projects will win accordingly.