For the second part of our series, ‘Getting smart with Consensus Mechanisms’, we will cover a little known, and little used consensus mechanism: Proof of Capacity.
We all know of the most common types of consensus mechanisms, but upon our research, came across the unfamiliar protocol of Proof of Capacity. This peculiar form of mining is surprisingly only used by one coin currently, burstcoin. You may have heard of this coin before, as it was recently endorsed by Mr. John McAffee. He stated, “first truly green coin’ when naming it coin of the day. Now we’re not one to take someone else’s advice or opinion when it comes to cryptocurrency, especially coming from an individual who’s coin promotions are questionable. So, we took a dive in, and did what everyone should do when it comes to cryptocurrency and blockchain tech – research!
First things first, what in the world is ‘Proof of Capacity’?
Well, the name is quite self-explanatory, once you understand what it means. It’s essentially using free disc space on your hard drive, to mine coins. The work begins before the mining process actually starts, with ‘plotting’ the hard-drive. In simpler terms: computing and storing solutions on your drive, before the mining process starts. The actual mining algorithms are way too intricate to be computed in real time, so what happens, is the solution that is already stored that finds the answer to the puzzle first – wins the block! This is the reason and meaning of the term, Proof of Capacity. Makes sense now, right?
One great way we found it to be stated, was “imagine you filled your hard drive with lottery tickets and then when a random number is generated, you check to see who has the most matching”
What are the benefits of ‘Proof of Capacity’?
- Because of the majority of the work being done beforehand, there’s relatively short block times. An average of one block per 4 minutes.
- It actually is a low-energy, green solution. It’s been said to be 30 times more efficient than ASIC based mining.
- It’s easy and realistic to start mining. Because everyone has a hard drive. For this reason, it can be argued that it’s more decentralized as well.
- You don’t need any specialized equipment to start. And, you don’t have to continually upgrade or repair equipment. And best of all, when you’re done mining – just wipe your hard drive, and it can be reused!
This sounds great, so what’s the downside?
- This is a relatively new solution. It hasn’t been stress tested enough, and it’s unknown whether it could perform properly on a massive scale.
- It can make your hard drive susceptible to botnets. Botnets are computer infections that are spread through malware, and use your computer’s resources often, without you knowing it.
- If this consensus mechanism was to become highly popular, only miners with very large amounts of storage space could compete for blocks. Gone would be the everyday Joe, making use of his free disc space.
Is there a future for Proof of Capacity?
It’s an intriguing solution to the current problems presented by Proof of Work mining. The low cost to setup and operate a node, makes it cost effective and equally sustainable. Eco-friendly solutions are of high interest, in a time when Bitcoin networks are consuming massive amounts of energy. It’s uncertain whether it can really overcome scaling difficulties presented by more well-established blockchains. Only time and testing will tell.
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Is VIT hard-fork of Steem platform? Steem is using Proof of Stake consensus mechanisms. What is difference between Proof of Stake and Proof of Capacity?
VIT is actually a software fork of STEEM, meaning it is a modified version of the STEEM code. STEEM actually uses Delegated Proof of Stake (DPoS) which is quite different from PoC or PoW. We'll be covering Proof of Stake (PoS) and Delegated Proof of Stake (DPoS) very soon!
I'm so excited for this project! Go VIT!
Thanks for your support!
Very nice explanations you shared here... Learning more about crypto world everyday :)
I have a doubt though. Even to save n number of hashes on your computer's hard drive you have to run the hash function n number of times. After which you fill your hard disk space with all these hashes. It will then be followed by search algorithm that will search some nonce value in those hashes. So time taken to find the hash will be O(hash function + O(search). It sound like a preimage search. I am guessing you will have to do this for every block sent to you because the number of transactions should update what is to be hashed. So unless you can use same list of hashes for some x number of blocks, how does it improve the mining efficiency. Plus now your cpu is hashing and searching. Shouldn't that increase the energy cost? What am I missing here?
Amazing explanation! Thank you so much for passing on your wisdom. Mining isn't for the faint of heart, but if you have a strong will to do it, you can. A friend of mine has 6 hard-drives running right now.