What Is Proof-of-Burn?
Proof-of-Burn (PoB) is an alternative consensus mechanism used in some blockchain systems, offering a different approach to preventing fraudulent transactions and improving overall efficiency.
In a blockchain, which serves as the shared database for a cryptocurrency, transactions are recorded in blocks.
These blocks are added to the blockchain when participant nodes reach a consensus on the validity of the transactions.
Consensus mechanisms ensure agreement among nodes on what constitutes valid transactions.
Eco-Friendly Mining
Proof-of-Burn addresses the energy consumption issues associated with proof-of-work (PoW) based blockchains by offering a more resource-efficient alternative.
In the PoB mechanism, miners burn digital currency to earn the right to create blocks.
Burning coins involves sending them to an unspendable wallet address, permanently removing them from circulation.
Efficiency and Flexibility
This process consumes fewer resources, including energy, than traditional mining methods.
It helps maintain an active and agile network.
Miners can choose to burn the native currency of the blockchain or an alternative chain’s currency.
In the latter case, they receive a reward denominated in the native currency of the blockchain.
By implementing Proof-of-Burn, blockchain systems aim to address the energy consumption concerns associated with traditional consensus mechanisms while maintaining the network’s security and integrity.