Efficiency of Proof of Work

While it may seem that Proof of Work is an inefficient system which consumes vast amounts of energy, this is not the full picture. Since the inception of the network, Bitcoin has distributed its base tokens of account (Satoshis) by including them as a block reward subsidy, with the intention of bootstrapping node operations. As per the Bitcoin white paper, the block reward will eventually entirely transition to transaction fees. As this occurs, nodes will be incentivised to get as many transactions as possible inside each block; meaning the amount spent on Proof of Work per transaction must be a small part of the fees contributed to the block reward. Furthermore, since the cost of finding a Proof of Work is decoupled from the cost of building and propagating blocks, as block sizes grow the system becomes more energy efficient - much more efficient than current infrastructure. This economic security is an important aspect of the network's stability and resilience to attack.