What is Proof of Burn (PoB)
Proof of Burn is a security protocol used in cryptocurrency that allows users to certify that they have burned a specific number of coins. The protocol is designed to increase the security and permanence of a cryptocurrency network. In order to burn a cryptocurrency, users must first create a transaction that transfers the coins to a designated address. After the transaction is confirmed, the user must then send the remaining coins to a separate address. Finally, the user must wait a set amount of time before sending the coins back to the original address. The purpose of PoB is to ensure that users are actually burning their coins in order to gain rewards.
The proof of burn concept is similar to the proof of work (PoW) concept, but with one key difference: proof of burn requires the burning of coins, not computational work. This makes it an effective way to reduce the supply of a cryptocurrency, as it requires those holding the currency to sell it in order to support the network.
Pic gotten from pexel.
Apart from Proof of Burn, there are many other consensus mechanisms but for the purpose of this group I’ll just list some of them, later, if they require explanation we’ll briefly look over them. They are:
- Proof of Work;
- Proof of Activity;
- Proof of Authority;
- Proof of Stake;
- Proof of Capacity;
- Proof of Existence;
- Proof of Weight;
- Proof of service; and on and on.
Benefits of PoB
The use of Proof of Burn (PoB) in cryptocurrency can provide three key benefits, which are:
It helps to increase the value of a coin by encouraging people to use and burn it, thereby creating new coins; and
It ensures that a coin is actually being used and not just sitting on a wallet or exchange.
It discourages people from hoarding coins, as burning coins (using coins) rather than just sitting on a digital asset without any real value.
In short; PoB is burning coins in order to receive rewards, which give rise to the proverb; Life is give and take!!!
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