What Is Proof-of-Burn?
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.
Proof-of-Burn addresses the energy consumption issues associated with proof-of-work (PoW) based blockchains by offering a more resource-efficient alternative.
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.