About the Proof of Burn Consensus Algorithm

Blockchain technology and cryptocurrency still remains one of the greatest inventions in the past decade. Over the past few years, blockchain technology and cryptocurrency has continued to grow at a massive rate, spreading across various sectors and industries and nations as more and more people are beginning to see the power of blockchain technology and cryptocurrency.

One of the main aspects blockchain and cryptocurrency is the consensus algorithm and so far there are a number of different consensus mechanisms and each having their pros and cons.

The proof of burn algorithm is basically a type of consensus mechanism which was developed as an alternative to the proof of work and proof of stake consensus algorithms. It is a method for distributed consensus mechanism or protocol where miners reach consensus my burning coins. In other words, miners send burn coins by sending the coins to public addresses that are verifiable where the coins cannot be retrieved again.

The proof of burn consensus protocol is a very different type of consensus mechanism especially if you compare it to the proof of work where miners need expensive and high energy consumption hardwares in order to mine block and proof of stake where consensus is reached by the amount of coins stakes in the blockchain network. The proof of burn aims to eliminate all those hassles and instead allowing miners to reach consensus by burning coins to irretrievable public addresses. As miners commit their coins, they earn the reward and privilege to mine on the network based on selection process that is random. One of the main differences of proof of burn networks compared to proof of work networks such as ethereum when it comes to validating transactions is that proof of work uses physical expensive and high power consumption mining rigs while proof of burn makes use of virtual mining rigs to validate transactions.

How Proof of Burn works

This is one consensus algorithm that operates differently compared to the two most popular types of blockchain consensus algorithms. Like the name says, proof of burn is about burning coins which consists of sending coins (burning) to addresses that cannot be accessed or retrieved. These addresses are not human wallet addresses but rather addresses known as eater addresses which are randomly generated and do not have any associated private key.

How Proof of Burn Differs From Two of the Most Popular Consensus Algorithms Proof of Work and Proof of Stake

Proof of burn requires miners burning coins in addresses that are unrecoverable to reach consensus while proof of work requires mining making use of high energy mining rigs and high computing power to reach consensus while proof of stake requires miners reaching consensus based on the amount of coins held or stakes in the network.

In proof of burn, there is no competition for miners to add block and validate transaction on the blockchain network while in proof of work, there is competition as miner compete against themselves to the first to solve the complex mathematical problems and puzzles in order to add a new block on the blockchain.

In proof of burn, there is miners make use of virtual mining rig while in proof of stake, the larger the stake of the miner, the higher the chances of being selected to create a new block on the network.