Crypto Academy|Season 2 Week 5 | Homework Post For @alphafx- Consensus Algorithm

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Hello everyone. First i would like to thanks @alphafx for your great lecture. in this week the professor talked about different blockchain algorithms. The Assignment of this week is

Write on any of these consensus algorithms extensively

• Stellar Consensus Protocol
• Proof of Capacity
• Proof of Burn
• Proof of Elapsed Time

According to them I'll talk about the "Proof of Burn" consensus algorithm for this week.

What is Proof- of- Burn (POB)?

Before talk about Proof- of- Burn (POB) i want to explain what is consensus algorithm? A consensus algorithm is a method by which all peers in a Blockchain network reach a consensus on the current state of the public ledger. Various consensus algorithms are used in blockchain programs. Some use the Proof of Work consensus algorithm, which is also used by Bitcoin and Litecoin . Steem used the Delegated Proof of Stake consensus algorithm.

Proof of burn (POB) is one of the authentication mechanisms used among blockchain networks to guarantee that both nodes consent on the blockchain network's real and valid state. Proof of burn (POB) is a consensus algorithm that attempts to solve the POW system's high energy consumption problem.

In other words, users can demonstrate their commitment to the network by performing coin burns, earning the right to "mine" and validate transactions.

The PoB process is a modern kind of consensus algorithm. It is similar to proof-of-stake (PoS) because both consensus algorithm communicate with coins to protect the network.

How does Proof of Burn (PoB) work?

The method of burning coins involves submitting them to a publicly verifiable address, where they become unavailable and worthless. Burn validates transactions using simulated mining rigs rather than actual ones. PoB miners burn coins to demonstrate their presence in the network and gain permission to mine. The coin burn method on proof-of-burn (PoB) networks entails sending coins to a “eater address,” which is publicly verifiable but unavailable. It should be remembered that the addresses of the eaters are randomized and that they do not have private keys.

The method of burning coins decreases commodity availability and causes economic scarcity, potentially increasing the value of the coins. Another way to invest in network security is to burn coins.
Like PoW blockchains, PoB schemes can offer block prizes to miners, and the incentives are required to offset the initial cost of the burned coins within a given amount of time.

Some Cryptocurrencies that Uses Proof of Burn (PoB)

1.Slimcoin (SLM)

2.Counterparty (XCP)

3.Factom (FCT)

Advantages of Proof of Burn consensus algorithm

• There is no requirement for mining hardware. Coin burns are essentially automated mining machines.
• Proof of Burn consensus algorithm are more miners' loyalty. Power demand has been reduced.
• There would be a reduction in the amount of cryptocurrencies accessible. The price of bitcoin rises as the value of cryptocurrency falls.
• Miners' commitment to the network is increased. Miners who use a lot of resources tend to secure the network for a profit.
• Coin distribution and processing are less concentrated.

Disadvantages of Proof of Burn consensus algorithm

• PoB is not environmentally friendly since the Bitcoins burned are created by PoW mining, which consumes a lot of energy.
• This is a dangerous gamble and there is no guarantee that the original volume of crypto burnt will be recovered in full.
• It has not been shown to function on larger scales. More research is needed to ensure its efficacy and security.

Conclusion

Really appreciate professor @alphafx for you wonderful lecture. The Proof of Burn consensus algorithm is a relatively recent and underappreciated algorithm. It has good sides but also due to some drawbacks Investors should be mindful of in order to feel confident about the investment they are making.

Cc:
@steemitblog
@alphafx