Crypto Academy Homeworkpost Season2-Week5 for Professor @Alphafx by @Nikoyana

Good day steemians and a special regards to professor @alphafx

Blockchain is termed as the record keeping technology for cryptocurrencies, it hold all its data or information in blocks and the blocks which are connected to each other serves as the storage data, a new filled block is added to the blockchain only when all nodes on the blockchain have agreed and termed that block valid.

A consensus mechanism is required to verify that the nodes have agreed on the valid block.
This consensus algorithm mechanism are proof of burn,proof of stake, proof of work, delegated proof of stake, and among others,but today we are going to discuss about proof of burn.

Proof of burn was introduced by Iain Stewart in 2012.Proof of burn consist of two stages,first stage where the cryptocurrency is being sent to a tagged address where the cryptocurrency becomes unspendable and irretrievable.

Second stage verifies whether the tagged address is really unspendable and truly whether cryptocurrency was sent to the tagged address.
Proof of burn compared to proof of work uses a minimal energy consumption.

In proof of burn miners reach consensus by burning virtual coins that is eliminating a particular cryptocurrency in circulation inorder to earn more mining rights, the more coins a miner burns the more mining power they get.
By burning coins it tend out that the coins become scarce and adds value but when new blocks are mined burnt coins value reduces so the miner has to burn more coins inorder to get the next mining power.

Moreover,the burning of coins enables miners to be committed to the network since they have sent thier cryptocurrency to an unspendable address thereby ensuring security to prevent any malware attack this is done inorder not to loose thier investment and also be rewarded to mine.

Method of Proof of Burn
Portion of coins in circulation is sent to a verifiable address with tag,this address is not accessible to anyone and the coins becomes irretrievable and unspendable when sent to this address.

The coins are then burned, after the burning the tag of the address is use to verify or proof whether truly the cryptocurrency was sent to that address and burnt.

Coins burned here consume less energy as compared to proof of work which makes use of excessive energy because of the use of powerful computation devices.

Difference between Proof of burn and Proof of work.
a)Proof of work is all about completing mathematical puzzle or cryptographic algorithm while Proof of tokens involve burning of cryptocurrency to get more mining power.

b)Bitcoin and ethereum make use of proof of work while slimcoin(SLM),counterparty(XCP), and factom(FCT) make use of proof of burn.

c)In proof of work not every participant gets a reward rather who solves the puzzle first but in proof of burn depends on the number of coins burnt inorder to be rewarded to mine the next block.

d)In proof of work investments are made through labour,excessive computation devices while in proof of burn investments are made through coin burnt.

e)Huge resources are consumed in proof of work that is proof of work consumes huge amount of energy inorder to mine while in proof of burn only the burned coins are consumed inorder to mine leading to use of less resources.

Differences between Proof of burn and Proof of stake.

a)Proof of burn rewards more entrepreneurial risk while Proof of stake rewards wealth.

b)Proof of stake miners are rewarded based on how much coins staked or locked while in proof of burn miners are rewarded based on how much coins burnt.

c)Coins stake canbe redeemed in proof of stake while coins burnt in proof of burn cannot be redeemed.

d)In proof of stake investments are made in staked coins while in proof of burn investments are made in burnt coins.

Advantages of proof of burn

1)Adds value to the cryptocurrency and reduces inflation.

2)Ensures the commitment and honesty of miners to the network since they don't want to loose thier investment.

3)proof of burn makes use of less energy.

Disadvantages
1)Proof of burn is not yet popular.

2)Burning coins does not guarantee mining power since the more coins burnt the more power to mine,therefore the miner who burns more coins get the mining power.

3)Proof of burn leads to scarcity of the cryptocurrency.

Conclusion
In conclusion proof of burn is a good consensus algorithm mechanism because it majorly reduces inflation and makes it difficult for the price of the coin to be dumped.

CC:
@steemcurator01
@steemcurator02
@alphafx