Crypto Academy Week 13 - Homework Post for [@alphafx] // PROVE OF BURN CONSENSUS ALGORITHM

Hello there, Prof @alphafx!

I am delighted to be a part of this week's crypto academy lesson, and please find below my submission for the @alphafx homework task on the Consensus Algorithm in cryptocurrency.
Before beginning this work, let us define consensus logarithm in simple terms.

CONSENSUS ALGORITHM

Everything in blockchain is about security, transparency, and privacy, but there is no body or group that control transactions, so any transaction on any blockchain is considered safe and verified.
This is due to the presence of a consensus algorithm, which is a system in which all of the nodes in a specific blockchain come together to reach a common agreement on all of the ledger distributed at a specific time. This ensures that only correct and truthful blocks are added to the system, making blockchain reliable and establishing trust between two unknown peers doing business.

Because of the decentralized nature of blockchain, a system is required to ensure that all nodes agreed to one transaction and validated it, which is possible through a consensus mechanism.

PROOF OF BURN (POB)

SOURCE

When compared to other consensus algorithms, this is one of the most reliable with the least amount of energy consumed. Miners achieve consensus by burning coins, which eliminates coins from circulating in the system.
This consensus type validates many transactions while also assisting in the reduction of price inflation in the cryptocurrency market. Miners use a mining rig to start coin burning and then mine coins later.

The more a miner burns a coin, the more mining power they gain, and the more mining power they have, the easier it is for miner to identify new blocks and the more coin they can mine to increase their earnings.

example of token using prove of burn is slimcoin a virtual currency network.

HOW DOES PROOF OF BURN WORKS

Before miners burn coins, they send them to a system address called the eater address, which can be verified by all blockchain users but cannot be accessed because they do not have private keys.
Miners interact with the coins before permanently erasing them, as opposed to POS, where the coins are stored in POS systems and individuals who owe the coins can use them when they are needed.

Miners can burn native currencies or alternative currencies and receive rewards in native blockchain tokens. They can also send transactions to any network where they will want to burn their blockchain tokens, as well as other miners, can burn or mine tokens on your block, keeping the system active.
The burning of these coins contributes to the scarification of the coins, increasing their market demand and value.

ADVANTAGES OF PROOF OF BURN

• It does not require any powerful machines or hardware, so energy consumption is very low.

• It is inexpensive to begin because miners do not purchase expensive hardware; instead, they use the systems mining rigs.

• Burning coins causes scarring, which increases their value due to high demand.

• Coin distribution and mining are decentralized.

DISADVANTAGE OF PROOF OF BURN

• It is slow in terms of transaction validation and coin burning

• It is unfriendly to new users because the burning process is not always transparent

• It is unclear whether it can be used on a large scale blockchain.

• It takes a lot of resources to burn bitcoin mined with POW.

In conclusion, I believe that Prove of Burn is the next revolution in consensus algorithms because it requires less power and resources to burn the coins. Miners will prefer this because the more coins they burn, the more mining power they gain, so no one benefits more than the other here.