Bitcoin’s Proof of Work Secures Its Ledger, Not Wallet Keys

Bitcoin’s proof-of-work system helps secure its transaction history, while private keys authorize spending. The two serve different roles in protecting Bitcoin users and their assets.

Key management and custody remain separate parts of Bitcoin security, with risks that proof of work does not address.

Bitcoin uses SHA-256 for proof of work. Changing an earlier block would require redoing the work for that block and every block after it.

Wallets manage the private keys that authorize spending. Files containing those keys can be lost or stolen, leaving users exposed to a risk that proof of work does not address.

People who hold assets through a custodian also depend on the firm’s security and solvency. Offline wallets, hardware wallets and multisignature transactions are among the available safeguards.