Crypto Academy Week 13 Homework Post For @alphafx [Consensus Algorithms]
Hello all....
Today I will try to work on the homework given by professor @alphafx, namely regarding the Algotithms Consensus. This class is very interesting to discuss, as for I will choose one of the homework given. So on this occasion I will discuss Proof of Burn, let's just jump into the discussion
Proof of Burn
Proof of Burn is a part of the consensus algorithm. as the name means something has to be burned, "yeah that's right". because Proof of Burn has a mechanism to burn cryptocurrency so that it is expected to increase the chances of increasing the value of the cryptocurrency. cryptocurrency that has been burned can no longer be transacted.
The idea of Proof of Burn was put forward by Iain Stewart, this mechanism is expected to increase network security in the mining process. the miners have to invest a little of their capital to get profit from the mining process. the bigger the cryptocurrency that is burned, the greater the chance for the miners to get rewards from the mining process.
Proof of Burn was created as an alternative to solve problems in other consensus algorithms such as reducing high energy consumption. Proof of Burn also does not require hardware in the mining process, the mining process is done virtually. This can be said to be a worthwhile investment because the cryptocurrency that is burned can be said to replace capital in the provision of hardware in the mining process.
How Does Proof of Burn Work?
in the proof of burn mechanism burning a cryptocurrency means that there is cryptocuurency that must be removed and cannot be transacted. as for the cryptocuurency burning is done by sending the cryptocurrency to a special address. the address stores cryptocurrency and cannot be opened and accessed. cryptocurrency that has been sent to that address can no longer be used.
The process of burning cryptocurrency in Proof of Burn by sending to a specific address aims to reduce the amount of cryptocurrency in circulation and can increase the value of the cryptocurrency, so that the proof of burn mechanism can improve the balance in the mining process and increase network security in the process.
Comparison Between Proof of Burn and Proof of Work
Here are some comparisons between PoB and PoW :
- PoB power consumption is less than that of Pow
- In operating PoB does not require a mining rig so that the capital spent in operating PoB is lower than that of PoW
- The level of safety and efficiency in operating PoB is lower than PoW
Comparison Between Proof of Burn and Proof of Stake
Here are some comparisons between PoB and PoS :
- In PoB the coins have to be burned to complete mining and get the reward whereas in PoW the miners have to stake a certain amount of their coins
- In operation, PoB does not require hardware, so the cryptocurrency burning mechanism can be said to be proof of investment by miners, whereas PoS requires expensive hardware.
- in PoB it reduces the number of coins circulating in the market to create scarcity of these coins thereby increasing the chance of an increase in the value of these coins.Whereas in PoS there is no scarcity of coins circulating in the market
An Example of a Project That Uses Proof of Burn
Here are some cryptocurrency projects that use Proof of Burn
- Slimcoin is one of the cryptocurrencies that uses PoB, while the PoB mechanism used in this project is by burning some of the rewards that miners get. this mechanism is carried out in order to replace the initial capital that miners do not spend to buy expensive hardware.
- Factom is one of the cryptocurrencies that uses PoB, while the PoB mechanism used in this project is by burning and creating cryptocurrency units again. the factom market supply to the market has decreased drastically because in factom the cryptocurrency unit that is burned is very large
Advantages of Proof of Burn
Here are some of the advantages of Proof of Burn :
- in operating PoB, the initial capital issued is lower than other consensus algorithms, because it does not require mining rigs
- low power consumption
- reducing the supply of cryptocurrency coins thereby increasing the chances of increasing the value of the cryptocurrency coins
Disadvantages of Proof of Burn
Here are some of the disadvantages of Proof of Burn :
- The Proof of Burn verification process is slower than other consensus algorithms
- less popular than other consensus algorithms
- PoB is not stable enough, so it takes a lot of testing to increase PoB
Conclusion
Proof of Burn is a consensus algorithm that has a working mechanism by burning cryptocurrency units. as for this mechanism is done by sending to a specific address that cannot be accessed by anyone. burning cryptocurrency units can reduce the market supply thereby increasing the value of the cryptocurrency coins.
That's all my homework, hopefully it can be useful. Thanks....
Cc: @alphafx
Cc: @steemcurator02
Hi @zacky07 excellent, this was one of my favorite tasks (PoB).
The only thing I think you got confused here, if not sorry.
You wrote Pod instead of Pob . Good luck on the result !!!
Hi @cieliss, sorry there was a slight word error at the time of writing, thanks for the advice
task satsfactorily completed
Thanks for participating
Thanks professor