The Proof of Burn Consensus Mechanism
Proof of Burn (PoB) is one of the several blockchain protocols used for the validation of transactions. Unlike consensus mechanisms like Proof of Work (Pow) and Proof of Stake (PoS), PoB utilizes the erasure or destruction of cryptocurrencies to secure blockchain networks. Miners must put forward a PoB transaction if they are to generate new blocks and receive the appropriate rewards. This transaction entails transferring a set of coins to an address that will never see utilization again. Such coins are “burned,” or destroyed, after being transferred.
Proof-of-Burn is a genuine investment where users can become miners. They are unable to generate blocks by simply burning any number of coins. To be an active part of a PoB network, users have to offer something that is a worthwhile sacrifice. This makes sure that only users who are really invested are a part of such processes, and makes the network more stable.
How Does It Work?
Iain Stewart, the man behind the PoB consensus mechanism, describes the protocol with an analogy where he says that burned coins are comparable to mining rigs. In this comparison, miners burn their cryptocurrency to purchase virtual mining rigs that will allow them to mine blocks. Consequently, these virtual mining “rigs” will grow as more coins are burned.
Users can utilize the network to send out transactions that will burn their tokens. Network participants can mine or burn over other users’ blocks, and users can also include other participants’ transactions in their blocks. The more coins a user burns, the greater their mining privileges are. In other words, by burning more coins, they will have higher odds of successfully mining the following blocks, which will increase their rewards.
The phrase “Proof-of-Burn” refers to the act of locking a certain quantity of cryptocurrencies (typically Bitcoins or any other digital asset) and transferring them to an unusable address in return for tokens on another blockchain. Because they can no longer be utilized for anything…
