Proof-of-Burn (PoB) Key Points
- Proof-of-Burn (PoB) is a consensus mechanism used in blockchain networks.
- It involves users ‘burning’ or making their own coins unspendable, effectively removing them from circulation.
- The process of burning demonstrates a long-term commitment to the network, as coins cannot be recovered once burned.
- The technique provides a way for users to ‘mine’ new coins without the need for expensive hardware.
- Proof-of-Burn is an alternative to Proof-of-Work (PoW) and Proof-of-Stake (PoS), aiming to be more energy efficient and fair.
Proof-of-Burn (PoB) Definition
Proof-of-Burn (PoB) is a blockchain consensus algorithm that lets users participate in the network by burning their cryptocurrency, making it unspendable. This act demonstrates the user’s long-term commitment to the network and gives them a chance to mine new blocks. It’s a resource-friendly alternative to Proof-of-Work (PoW) and Proof-of-Stake (PoS), as it doesn’t require high computational power or large amounts of coins.
What is Proof-of-Burn (PoB)?
Proof-of-Burn (PoB) is a method used in blockchain networks to achieve distributed consensus.
Unlike other consensus methods, PoB involves users ‘burning’ their existing coins by sending them to a verifiably unspendable address.
This act is interpreted as proof of the user’s commitment to the network.
Who uses Proof-of-Burn (PoB)?
Proof-of-Burn is employed by various blockchain networks that want to offer a fairer, more energy-efficient alternative to Proof-of-Work and Proof-of-Stake.
It’s also used by users who want to participate in the network without the need for expensive mining hardware or a large stake in the network’s coins.
When is Proof-of-Burn (PoB) used?
Proof-of-Burn is used whenever a transaction takes place on the blockchain network that employs this consensus mechanism.
Users burn their coins as a way to validate transactions and create new blocks in the blockchain.
Where is Proof-of-Burn (PoB) used?
Proof-of-Burn is used in blockchain networks that have implemented this consensus mechanism.
The burned coins are sent to an unspendable address within the same blockchain network.
Why is Proof-of-Burn (PoB) used?
Proof-of-Burn is used because it’s a more resource-friendly alternative to other consensus methods.
It doesn’t require the high computational power of Proof-of-Work, or the large stake of coins needed for Proof-of-Stake.
By burning their coins, users demonstrate their long-term commitment to the network, which can lead to greater trust and stability.
How does Proof-of-Burn (PoB) work?
In Proof-of-Burn, users send their coins to an ‘eater address’, which is a verifiably unspendable address.
This act of ‘burning’ coins makes them unspendable, effectively removing them from circulation.
The burned coins are then recorded on the blockchain, and the user is rewarded with the opportunity to mine new blocks, based on the amount of coins they burned.
The idea behind this is that users who are willing to burn their coins are likely to be long-term supporters of the network, and therefore can be trusted to mine new blocks.
