Hello colleagues from the CryptoAcademia, a cordial greeting to all of you. Today I bring you my participation in the assigned task of our teacher @alphafx which I am very grateful for being part of it and doing my homework for week 5 ... Without further ado let's get started!

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Algoritmo de consenso / Consensus Algorithm

A consensus algorithm is a type of mechanism that is adapted by a blockchain network to reach an agreement and be able to determine the state of the blockchain, answering various questions such as its validity in the chain's network of blocks, the sum of blocks, when the desired block can be added and to whom. The implementation of the consensus is distinguished based on decentralization, the security that entails it, the incentives, among other different measures. There are many consensus algorithms including a proof of work, proof of status, pride of authority, proof of weight, proof of contribution, among other types of tests. But the most common that are included are Proof of Work, Proof of Stake, and Delegated Stake.

En esta tarea discutiré sobre la prueba de quemado / In this assignment I will discuss Proof of Burn

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Prueba de quemado (PoB) / Proof Of Burn (PoB)

This is a hybrid consensus mechanism, which helps to ensure and guarantee the validity of a blockchain by burning coins, it is adapted and designed for blockchain technology to improve its validation and reward system in Blockchain technology. In this particular algorithm, the "Burning" of the coins helps to keep the mechanism or algorithm agile and rewarding due to the right it has to mine. The currencies that can be "burned" can be the Fiat or its similar in the alternative cryptography accredited as Ethereum, Bitcoin, ect.

To fully understand Burn Test a little better, it is necessary to understand Test of Work. This is because the proof of work bears a similarity to the burn test. Explaining a bit the proof of work is one of the first consensus mechanisms that was added by the bitcoin blockchain. Which are made up of different nodes that compete to solve a cryptographic problem and the first one to solve said problem has the power to add the next block. Although if a little difficult to solve, it is easy to check. It is very secure but time consuming and requires computer-intensive hardware.

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Características del Proof Of Burn / Characteristics of Proof Of Burn

· Reducción de consumo eléctrico y de costos en equipo de computación.

· Reduce el riesgo de ataque ya que el quemado de las criptomonedas sufre un gran costo.

· El protocolo logra una participación más descentralizada para sus participantes.

· Reduction of electricity consumption and computer equipment costs.

· It reduces the risk of attack since the burning of cryptocurrencies suffers a great cost.

· The protocol achieves a more decentralized participation for its participants.

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Motivación detrás de Proof Of Burn / Motivation behind Proof of Burn

The main objective of the design and creation of this Proff of Burn protocol is to create a type of consensus protocol that claims a really expensive job to execute and more efficient than Proof of Work. As such, the idea of consuming real and tangible resources such as a cryptocurrency with a real value was born, in order to achieve the ability to mine within the blockchain.

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Implicaciones Económicas del Proof Of Burn / Economic Implications of Proof Of Burn

1- Recompensa las inversiones a largo plazo. En el proceso de quemar criptomonedas es equivalente a gastar dinero a corto plazo para poder recibir recompensas a mediano y largo plazo. El incentivo es recuperar el dinero quemado con ganancias después de estar en un tiempo minando bajo el modelo de POB.

2- Las monedas quemadas están bloqueadas y no se pueden vender: Este sentido los participantes que están integrados al protocolo de POB se consideran como patrocinadores del sistemas, es decir, las monedas invertidas ya no se podrán utilizar y por lo tanto estas monedas ya no forman parte de una oferta disponible en el mercado.

3-Es más sencillo quemar monedas cuando son baratas: Cuando el precio de las monedas es bajo, la tasa de quemado debería ser más alta que en los tiempos en que las monedas tiene un alto valor. simplemente porque es más barato quemar monedas.

4-La prueba de quema puede funcionar como un mercado de futuros integrados: Una alta tasa de quema de monedas es una buena señal de entusiasmo.

Among the economic implications of the Burning Test, the following can be mentioned:

1- Reward long-term investments. In the process of burning cryptocurrencies it is equivalent to spending money in the short term to be able to receive rewards in the medium and long term. The incentive is to recover the money burned with profits after spending some time mining under the POB model.

2- The burned coins are blocked and cannot be sold: In this sense, the participants that are integrated into the POB protocol are considered as sponsors of the system, that is, the invested coins can no longer be used and therefore These coins are no longer part of an offer available on the market.

3 - It is easier to burn coins when they are cheap: When the price of the coins is low, the burning rate should be higher than in the times when the coins have a high value. simply because it is cheaper to burn coins.

4 - The burn test can function as an integrated futures market: A high coin burn rate is a good sign of enthusiasm.

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Proof of Burn vs Proof of Stake

POB and POS have one thing in common, which is the fact that block validators have to invest their coins in order to participate in the consensus protocol. Likewise, POS blockchains require forgers to stack their coins, usually blocking them. But if they decide to give up the network, they can get back those invested coins and be able to sell them to the market again. Therefore, there is no permanent shortage in the market in such a scenario because the coins are only withdrawn from circulation for a certain period of time. Rather, the POB's block validators have to destroy their coins forever, creating a permanent economic shortage.

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Ventajas y Desventajas de Proof Of Burn / Advantages and Disadvantages of Proof Of Burn

Las ventajas y desventajas se basan en los argumentos generales de POB y no deben considerarse hechos comprobados.

The advantages and disadvantages are based on the general arguments of POB and should not be considered factual.

Ventajas / Advantage

º Fomenta el compromiso a largo plazo de los mineros.

º No hay necesidad de hardware de minería, es decir que las quemaduras de las monedas son plataformas de minería virtual.

º La distribución de monedas en la minera tiende a ser menos centralizada.

º Es más sostenible, tiene menos consumo de energía.

º Puede emplearse para darle un tipo de valor a un nuevo token en desarrollo.

º Encourages the long-term commitment of miners.

º There is no need for mining hardware, meaning the coin burns are virtual mining rigs.

º The distribution of coins in the mining company tends to be less centralized.

º It is more sustainable, it has less energy consumption.

º It can be used to give a value type to a new token under development.

Desventajas / Disadvantages

º Los tokens a ser quemados pueden prevenir de otros tipos de criptomonedas como el Bitcoin, o de procesos alternativos de POW. Haciendo así de este protocolo no sea tan favorable con el medio ambiente.

º El proceso de verificación es realizado por cada minero lo cual es mucho más lento.

º Al no tener una garantía de recuperar los valores de las criptomonedas quemados, los usuarios corren el riesgo similar a que cuando realizan inversiones.

º The tokens to be burned can prevent other types of cryptocurrencies such as Bitcoin, or alternative POW processes. Doing so this protocol is not so environmentally friendly.

º The verification process is carried out by each miner, which is much slower.

º By not having a guarantee of recovering the values of the burned cryptocurrencies, users run a risk similar to that when they make investments.

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Criptomonedas que Utiliza Proof Of Burn / Cryptocurrencies used by Proof Of Burn

Currently, the cryptocurrencies that are used in this POB protocol are Slimcoin (SLM), Counterparty (XCP) and Factom (FCT).

Slimcoin is an open source cryptocurrency that is used by the Proof Of Buns for the creation of its tokens for burning them in virtual mining. On the other hand, Counterparty (XCP) uses POB only for the creation of its tokens, in which users will send their bitcoin to an eater addresses and in exchange for Counterparty tokens. And Factom (FCT) uses a more complicated process, the chips are constantly growing through the monetary policy of the project.

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Conclusion

As can be shown, the burning of coins can be due to several well-defined factors, either to increase the value of the cryptocurrency that is burned, to produce new tokens as a form of payment for miners in order to earn the right to mine in a certain network, as a consumer currency in the management of smart contracts, in order to eliminate the remaining cryptocurrencies placed in an ICO.

To conclude this task, we can say that the burning of coins is part of a practice that guarantees the performance of the cryptoactive within the market.

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So I finish this week's assignment from professor @alphafx, which I thank again for being able to participate in it. Blessings!

Cc
_{@beatriz01 / @alphafx}