crypto basics: How does the PoB protocol work?

By estrenoscinehoy.com | It's all about crypto | 8 Jun 2021

Hey mates!

Today we are going to talk about the Proof of Burn consensus algorithm. In my previous post I was talking about the Proof of Work consensus algorithm and why is really important in blockchains. So we are going to continue on this point.

The blockchains problem

Mainly the blockchain problems are:

the transaction speed
the high fees
the centralized nodes

Proof of Burn consensus algorithm only can solve the centralized nodes.

How is working Proof of Burn, PoB

The scenario can be this:

a node pays to validate to mine a block. The node can pay in BTC, ETH, or whatever.
the payment goes to an address without any owner, and nobody can use this address because nobody knows the private key of the address. This address is called eater address. The money at this address is not available so it's said that is burnt.
the node which has paid can validate mine a new block with all the transactions. Remember the first transaction in the block is a special transaction that generates a new currency owned by the creator of the block. That is the reward for mining.

As a resume, the node pays for mining, and the process gives him more money than the node invest at the beginning.

Security

The security system is based on the idea that if the nodes are paying for getting value, they don't want to break the system because they can lose their investments. In this way, there's no fear of a 51% attack.

Benefits

The main benefits are:

less energy consumption, because the node doesn't need to resolve a complex algorithm. Better for a sustainable environment. Less energy. less pollution.
decentralized and democratized system. Everyone can access it and can be part of the consensus algorithm.
better node's scalability

Cons

The verification process is slower than the PoW. So this protocol is not for all blockchains.
The algorithm can accept BTC or ETH to burn, and you can get some different tokens. But the BTC generation is coming from a PoW which is not energy efficient and it's doing a lot of pollution, so this consensus algorithm is not helping for a sustainable environment sometimes.

Conclusions

This is another consensus algorithm but as far as I know, it's not so popular as PoW or PoS in terms of implementation. I mean, this algorithm is used for special cases as the ICO cases where the not sold tokens are burned using this algorithm for instance.