Hashcash

Hashcash is a cryptographic proof of work (PoW) algorithm that requires a certain amount of work to compute, whilst also allowing efficient verification that the proof of work was completed.

It was initially created to limit email spam, due to rising numbers of unsolicited mailing was being automated world wide. Hashcash would make a system expend a small amount of CPU processing power calculating a ‘stamp’ prior to the sending of an email.

The receiver can then easily verify that this PoW was completed, thus ensuring users could filter their emails from ‘non-spam’ related address. The hope was, that email spammers would have to expend so much extra energy through this PoW system that it would make it infeasible for them to gain profit from the unwanted emails. Bitcoin took this PoW system and modified it to create Bitcoin mining as we know it today. One of the main advantages was the ability for users to easily see whether the PoW had been completed.

The receiver can then easily verify that this PoW was completed, thus ensuring users could filter their emails from ‘non-spam’ related address. The hope was, that email spammers would have to expend so much extra energy through this PoW system that it would make it infeasible for them to gain profit from the unwanted emails.

Bitcoin took this PoW system and modified it to create Bitcoin mining as we know it today. One of the main advantages was the ability for users to easily see whether the PoW had been completed.