Hello fellows. How are you all?
This is Aizaz Ghumman, here I am going to share my homework post on topic " Consensus algorithms " given by respected professor @alphafx.
Write on any of these consensus algorithms extensively
Stellar Consensus Protocol
Proof of Capacity
Proof of Burn
Proof of Elapsed Time
Proof of Burn
Proof of burn is used to validate the data that is stored on the blockchain. As an alternative to proof of work and proof of stake we have proof of burn. Proof of burn can be defined as the method for distributed consensus. You can also call proof of burn as the trade off to the proof of work because all the proof of burn crypto currency work on the basis crypto currencies mined based on proof of work.
The consumption of energy in Proof of burn is far more less than that of in Proof of work. The miners don’t need physical resources to burn the currency, A lot of resources and a power full hardware for crypto mining is not required for POB to work rather the virtual currency is burnt away as a kind of investment in the blockchain setup and main purpose of all algorithm such as proof of burn, is to limit malicious activities on the current blockchain. It is also used as a catalyst to help improve the transactional capabilities of the blockchain.
Image Source (edited)
Coin burning is a very sophisticated process, in coin burring they are sent on addresses where these coins are unascendable to be spent and interesting thing is, no energy is required to do this bit of the process.
The advantage in burning is, you can peel your block of cryptocurrency to burn the coins, other people can also use your block or alternatively, you can also add other people’s transactions and them to your block. All this burning activity does is to keep the blockchain in shape like a well-oiled machine for processing the transactions.
The more burnt coin you have the more power comes with it. That is the basic thinking right, well you are wrong, to avoid such advantages POB uses a mechanism of parodic burning and coin decay.
Example of POB (Proof Of Burn)
Slim coin is a virtual currency network that uses POB. It allows miners to burn coins, which not only gives them the right to compete for the next block, but also enables them to keep at least one block for a longer period of time so that they can receive the year.
Difference between Proof Of Work and Proof Of Burn
Proof of Work
Proof of Burn
Require more energy for mining
Less energy is required
More resources and computational power are required
No physical resources are required
Require physical currency
Uses virtual currency tokens
Advantages and disadvantages of Proof Of Burn
The underlying section lists some of the advantages and disadvantages of POB. These advantages and disadvantages are purely from my own view point.
Advantages of POB
- More Stability.
- Less consumption of emery.
- Cost effective.
- No physical hardware requirement.
- Good for long-term mining process.
- POB is used for bootstrapping different cryptocurrencies.
Disadvantages of POB
- More test data is required to check POBs effectiveness on a larger scale.
- Slower in nature
- Not as eco friendly as it should be.
Projects that use POB
Following are the projects that Proof of burn.
Third Generation Coin (TG Coin)
Proof of burn is serving as a good alternative to the Proof of work in the sense that it requires less energy and less computational power to get the job done. It uses virtual asset coins to do the job instead of physical assets, which is a benefit in its own regard. Less energy requirement, A little need of physical hardware and the use of virtual coins to burn make POB a lucrative option for long-term investments.