Proof of Capacity - Uses, Advantages and Disadvantages

Blockchain technology is always changing. Different consensus mechanisms have developed to address the problem of scalability, security and energy. Proof of capacity has an unconventional way of working through storage space instead of processing power.

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Proof of capacity is a blockchain consensus in which miners use storage space on their hard drives. Proof of capacity miners solve cryptographic equations and secure hashes and save them in their drives. These saved hashes are used by the miner when a block needs to be mined.

Uses Of Proof Of Capacity

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There are different uses of proof of capacity in the blockchain. Here are different uses of proof of capacity:

Energy Efficiency

One major use of proof of capacity is its energy efficiency than the conventional blockchain consensus proof of work. It uses storage rather than the computational power for mining. It is the reason it consumes less electricity. This makes it an environment friendly consensus.

Decentralization

Proof of capacity allows the users to mine cryptocurrencies using the storage space. It makes it decentralized because it dies not require special hardware. It is more easy to use. It's usage requirements have low threshold. So theore people can join the network. Proof of capacity is more decentralized than the traditional consensuses such as proof of work.

Security

The cryptographic algorithms used in the proof of capacity provide security networks. The miners also ensure that they are loyal to the system by possessing pre-storied hash values on their drives. And then these already stored hash values are used. The distributed storage space increases the security levels. Distributed storage space lowers the chances of single points of failure.

The advantages of Proof of Capacity

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Cost Efficient

Setting up a proof of space mining operation can be less expensive than traditional mining rigs used in proof of work systems. Because the mining rigs are very expensive and they consume a lot of energy. So it is more cost effective than other traditional consensus. Instead of using high cost specialized devices miners who want to get into the mining business will only need disk space and existing equipment. It will reduce initial costs.

Scalability

The reason for choosing proof of capacity as a consensus mechanism lies in its scalability feature. In this storage capacity is easy to use and there is no need for additional expensive devices as the transactions increase. And proof of capacity continues its working even in the high load of transactions and it does not increase the transaction fees.

Dealing with Centralization

PoC decentralizes mining power by distributing it among participants based on the amount of stored data. This prevents the formation of giant mining pools or entities which may control over the network and enhances a more decentralized ecosystem.

Disadvantages of Proof of Capacity

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Long Initialization Time

The long initialization time of plots in which the pre computed hashes are stored is one disadvantage. Before this initialization proof of capacity mining cannot be started. It will take hours or even days depending on the space size and computational resources that miner have.

Storage Requirements

Significant storage space is required for PoC mining. Therefore as blockchain expands the storage requirements also increase. It becomes difficult for miners to participate in the mining pool who have few resources or those using devices with limited spaces.

Susceptibility to Attacks

Robust security features are embedded in proof of capacity system. But there are still some possible attacks like grinding attack where dangerous miners could pre-compute hashes. So they can manipulate the system. But there are solutions for this problem as well. Time lock in the plots can be used to avoid the pre-computation.

Conclusion

Proof of Capacity offers a quite attractive substitute for normal consensus mechanisms like proof of work. This makes it energy efficient and scalable. It provides decentralization which is another wonderful feature of this consensus. But it faces some issues as well. A big problem of proof of capacity is the initialization of mining which takes a lot of time. It can take hours or day as well. As far as blockchain technology keeps on changing then the Proof of capacity aims at creating more sustainable and democratic systems.