Proof of Burn

Proof of Burn (PoB) is a relatively new concept in cryptocurrencies. This consensus algorithm intends to make transaction verification simpler and more energy efficient. In this article, we will briefly explain what PoB is, its advantages and disadvantages and how it could change the course of the crypto market.

Why do we need a new type of proof?

After the creation of Bitcoin, developers started creating different cryptocurrencies. These interesting projects generally intend to facilitate transactions for people during their day-to-day lives. Developers have come up with many altcoins and new technologies that could solve some problems inherent to the crypto market. One of the problems to solve in cryptocurrencies is the issue of proving who deserves to receive newly issued coins.

Proof of Work (PoW) has historically been the proof of choice for most currencies. From gold to Bitcoin, the value of money often comes from the amount of work someone needs to do in order to obtain these assets. PoW has lately been receiving criticism because of the amount of energy required in order to mine new assets. To replace PoW, developers have proposed new systems that intend to maintain its security features while reducing the energy and cost required to verify transactions.

What is PoB about?

Ian Stewart devised PoB as a way to achieve an appropriate and efficient distribution system that improves on PoW. His main objective was to avoid the high equipment costs and electrical consumption that PoW currently requires.

Its operation is based on the fact that the members of the network burn the rewards that they get from the mining process. These rewards go to a verifiable public address (eater addresses) that has an unknown private key. Since the key is unknown to everyone, these tokens are effectively un-spendable. In exchange for this “burning” of assets, miners get network mining privileges or some token of an alternative currency.

Proof of Burn can be carried out within one currency or among several. In the first option, the miner burns native cryptocurrency of the specific blockchain. On the other hand, burning other currencies can be required to obtain new ones from the native chain. This algorithm represents a kind of short-term sacrifice for the miner. They will constantly burn their rewards to get more privileges on the platform, thus getting greater probability of selection to mine the next blocks.

An important part of this process is the public addresses that receive the burnt assets. These addresses, also known as “eater addresses”, have random private keys that are unknown to everyone. Since these addresses reside on the same network, they are perfectly verifiable by anyone on the network. This fact makes the burn permanent and secure.

What advantages and disadvantages does it have?

PoB has certain advantages and disadvantages as a consensus algorithm and as a means to achieve other purposes on a blockchain. On the one hand, its use could provide a project with a certain stability in the long-term. This is because the value of the currency increases when the availability decreases. At the same time, it would facilitate a more decentralized and equitable distribution of currencies.

However, PoB still maintains the disadvantage of being partly based on Proof of Work. This means that it still requires the use of vast resources. Also, the advantages are aimed at those users who are willing and able to burn more units. In addition, another unfavorable situation is that there is no complete guarantee of recovering the value of a destroyed token, making this process an investment with risks.


Proof of Burn is as an algorithm that seeks to position itself as an alternative to other consensus mechanisms. take advantage of its use in different ways with the returns it can offer. However, despite being an attractive option, this mechanism has its disadvantages, which must be addressed by developers to make it easier and more convenient to adopt them in other future projects.

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