What is Proof-of-Burn (PoB)?
Consensus protocols are intended to keep blockchain networks secure. The universal actions between all participating nodes in the blockchain networks are also provided via these protocols. Proof-of-Burn is a protocol where users join the network to carry out a different method — it aims to minimise energy consumption. If you have the question, what Proof-of-Burn (PoB), then you will find the answer in this article.
What is Proof-of-Burn?
Proof-of-Burn is an algorithm that allows all participating nodes to agree on the state of the blockchain network. Users participating in the Proof-of-Burn protocol burn cryptocurrency they own on the relevant blockchain. Users who perform this operation gain the right to mine the cryptocurrency and may receive the mining reward. With Proof-of-Burn, the problem of intensive energy consumption is addressed. Less energy is used. As part of the protocol, users burn their cryptocurrency to show their loyalty to the network.
How does Proof-of-Burn (PoB) work?
Proof-of-Burn allows miners to burn their crypto. Miners then get the right to create blocks with the cryptocurrencies they burn. The more cryptocurrency miners burn, the more rights they are granted to create blocks. To burn cryptocurrency the desired amount is sent to a public and verified address where cryptocurrencies cannot be spent ever again. The people who burn cryptocurrency are then eligible to receive a block reward when they mine.
The differences between Proof-of-Burn and Proof-of-Stake
In both Proof-of-Burn and Proof-of-Stake, users must invest in the relevant cryptocurrency to participate. In Proof-of-Stake, users’ cryptocurrencies are often locked in and unusable. But once the staking user leaves the network, they are able to retrieve their locked cryptocurrencies. For Proof-of-Burn, users give up their cryptocurrencies to join the network for good. They perform the cryptocurrency burning process and the cryptocurrencies they hold are permanently taken away. This transaction is irreversible.
