Crypto Academy ||Season-2 ||Week-5|| Homework Post for @alphafx|| Proof of Burn Consensus Algorithms.

abdulsabor (58)mutedin SteemitCryptoAcademy • 3 years ago (edited)

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As the previous lecture this lecture is prove to be very beneficial for me. In the previous lecture we learned about the Trading and Holding of Crypto asset. And we also learned about the best strategy of crypto trading. In this lecture I learned about the Consensus algorithms that different projects use for the data integrity and transaction execution. In this lecture we learned about the PoW, PoS and Delegated PoS consensus algorithms that are used my many crypto projects like Bitcoin Ethereum. But in this lecture Professor give the Homework about Three more consensus algorithm. I will try to explain is easy words. In this Homework I choose to explain Proof of Burn Consensus algorithm. I hope my explanation will help you to understand more about PoB.

What are the Consensus Algorithms?

Before going to discuss the types of Consensus Algorithm, we need to know about what is consensus algorithm. The word consensus is deducting from lattin Language, it generally means that “Feel Together”. On the other side Algorithms are well defined computer programs that are full of instructions are use to solve the particular problem. Simply we can say that Consensus Algorithms are well developed and well-defined computer codes that are used to maintain the integrity of data and security of network on the Blockchain. These algorithms allow users to make transactions. It allows user to make blocks and also mark check on the blocks. There are many types of Consensus Algorithms, like PoW, PoS and DPoS and few others. We will discuss about Proof of Burn Consensus Algorithm.

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What is Proof of Burn (PoB)?

Proof of Burn Algorithm is purposed by Iain Stewart that is well known person is cryptocurrency market. Proof of Burn is used as a replacement of Proof of Work consensus algorithm. This Algorithm is mostly similar to Proof of Word Algorithm but one thing that make it more advance that is less rate energy consumption. Block Validation function in Proof of Burn algorithm does need any powerful resources of computations. It does not dependent on the Mining hardware like ASICs. As we know that most of the Blockchains uses Proof and Work and Proof of Stack Algorithm. But the Blockchain also use Proof of Burn Algorithm as an alternative to those PoW and PoS Algorithms. It is use to verify the transaction in the Blockchains.

We can say that, when user doing Coin Burning then than user shows his commitment to Blockchain network. On the behalf of coin burning, they get the right to mining and Validate the transactions in the Blockchain. Burning process tends and represents the mining power that is virtual. If the user burns more coins, then this process is in the favor of the Blockchain network. On the behalf of burning more coin the user gets more mining power. The user who has More mining power has chance to be selected as a Block Validator in coming days.

Mining Power

The new block is achieved by the mining power. When we burn the coin token then we get the mining power. When the new block is mined then it reduces the mining power. The new block is become decayed when the mining power is reduces. In this way the minors burn the coins constantly to acquire the mining power.

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How does Proof of Burn Algorithm Works?

In this process we send the burning coin to public addresses. These addresses are generated randomly. On these addresses these burning coins becomes not accessible and we can say that they become useless. Coin burning process is caused to born economic scarcity and reduce the availability of market. Due to this process the potential Value is increase. We can say that Coin Burning is process in which we invest in the security of the Blockchain network.
Proof of burning idea is similar to PoW but, when we talk about the power consumption and computational power then Proof of burning is good enough than other Consensus algorithms. This algorithm is become secure when we invest through burning coin in the Blockchain network. When we talk about the block reward, it is same as PoW Blockchains. Bock Reward is provided to user with in the certain period of time. Reward is provided according to amount of investment of burning coins.

For Example:

1BitcoinEaterAddressDontSendf59kuE -> 13.18813499BTC

This is the private key that is exists statistically produce on a particular bitcoin address. It is transferring the internal work to get the token that are based on the Token burnt. For example in the mining of One bitcoin the power of 48800 kilowatt hours is required. If we burn ten bitcoins and expel 48800 tokens. These tokens called as tincoins. And each tincion power equal to 1kw hours for the work done.

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Proof of Work Algorithm
Versus
Proof of Stack Algorithms.

Proof of Stake algorithm requires from forgers to stake coins in to it. it is usually lacking them up. But one thing that we take in to count that is if Forger want to leave the Blockchain network then the Forger take the coin back and sell them in the market. There is no permanent Scarcity of market because our coins are circulating for a specific time period. But if talk about the Proof of Burn algorithm, validator is PoB destroy coin permanently for creating a forever economic scarcity.

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Advantages and Disadvantages of Proof of Burn Algorithm

Advantages and Disadvantages are explained on the bases of General Arguments and perceptions that are made by the supporter of Proof of Burn Algorithms. These are not considered as verified facts.

Advantages

It reduces the power consumption as compared to other algorithms.
Rigs are virtually mined by coin burning. There is no need to of hardware mining.
Circulation Supply and market scarcity is reduced due to coin burning.
In PoB Miner commits the long-term commitments.
It becomes less centralized due to coin distribution.

Disadvantages

Proof of Burn sometimes not eco-friendly.
It not able to work on large scale. There is need of confirmation of its efficiency and security.
Work of verification done by Miner is delayed.
It is slower then Proof of Work Blockchain.
Coin Burning process is not always easy to verify to average users.

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Conclusion

In this lecture we learned about the Consensus algorithms that are used by different projects in market. We learn about Proof of Burn Algorithm. We know about PoB algorithm that how It works and What are its difference with others. And what are the advantages and disadvantages of Proof of Burn. We learn how to Proof of Burn is better than Proof of Stake. It consumes less mining power than Proof of Stake algorithm.

THANK YOU