Special greetings to professor @alphafx and my colleagues student here. It has been an interactive lecture. I have keenly followed the lecture and I can say that through the step by step presentation of @alphafx, I have understood the lecture. I therefore try my hands on the assignment which is
Write on any of these consensus algorithms extensively
- Stellar Consensus Protocol
- Proof of Capacity
- Proof of Burn
- Proof of Elapsed Time
I would like to write on Proof of Burn
Now before I go ahead in explaining Proof of Burn, we need to understand Consensus Algorithms
What is Consensus Algorithms?
Consensus simply put is agreement between 2 parties, algorithms also simply put a set of rules that are followed in calculations. A term mostly used in mathematics and Computing. Now merging this two words, Consensus Algorithms is a termed used in computing to solve consensus issues or problems. Simply put a mechanism employed to reach an agreement between parties.
Consensus algorithms are so many types but I will be Talking about The Proof of Burn type
The Proof of Burn
This type of consensus came as the results of the Challenges associated with Proof of work, with proof of burns, Miners have the total control or power to burn some of their tokens as way of investing their tokens for future gains. This does not involve any computational process. This is seen by many as an alternative for POw a nd POS. This implies that, the more coins a miner burns, the higher of gaining more and being as a validator.
How Does Proof of Burn Works?
In a few phrases, the method of burning cash includes sending these to a public verifiably cope with in which they come to be inaccessible and useless. Usually, these addresses (aka. Eater addresses) are randomly generated while not having any private key associated with them. Obviously, the process of burning cash reduces marketplace availability and creates an monetary shortage, causing a capability growth in its cost. But extra than that, coin burning is some other manner of investing in the security of the network.
Advantages Associated With Proof of Burn
- Well, this type is very simple to use, since it is done virtually and does not take into consideration hardware's.
- It also reduce circulating supply of coins that is market scarcity.
- It gives miners the opportunity to have long term alternatives as they can burn their tokens if the markets tends to be bullish.
- It also reduced power consumption and is very sustainable.
Disadvantages Associated with Proof Of Burn.
- It involves so much process and makes it difficult to understand or use by an average user.
- Compare to the Proof of Work which seems to be more faster, miners verifications tends to delay.
- Security is not proven to be worthy compare to Proof of Work as it needs more testing.
Differences between proof of burn and proof of stake.
One factor that PoB and PoS have in common is the fact that the block validators have to make investments their tokens so as to participate within the consensus mechanism. However, PoS blockchains require forgers to stake their coins, commonly locking them up. But if they decide to go away the community, they'll take the ones coins returned and sell them in the marketplace. Consequently, there's no permanent marketplace shortage in this type of scenario because cash are best taken out of circulation for a sure period of time. Then again, PoB block validators should spoil their cash for all time, growing a permanent monetary scarcity.
The lectures has really broaden my knowledge on consensus algorithms, comparing the types, I will prefer to work along with proof of Work, It feels more secured compared to the rest, even though it has its won disadvantages. Well Proof of Burn is also recommendable type for investing. I will definitely make good use of this lecture in my quest in understanding cryptocurrencies and how mining is done. I will therefore follow your lectures to get more in-depth understanding.
Thank you professor @alphafx for inspiring us with your presentation