INTRODUCTION
Hello friends, it is a wonderful thing to be part
of this class delivered by professor @alphafx on Consensus Algorithm. The lecture was an educative and informative and I'm here to write my homework task. Before I delve into the crust of this homework,I will first of all define Consensus Algorithm.
Consensus Algorithm is a mechanism in computer science which is used to accomplish an agreement on a single data value in a distributed process. Due to so many unreliable nodes, consensus algorithm is targeted to accomplish reliability in the blockchain network. Consensus Algorithm ensures or make sure that, agents in the system can agree on a single course of action, although there are instances where some agents fail. This is why it is said that, the system must be fault-tolerant. There are so many types of consensus algorithm. They are; Proof of Work (PoW), Proof of Stake (PoS) etc. I listed these two first because, they are mostly discussed consensus algorithm. However, there are other consensus algorithms. They are:
- Delayed Proof of Work
- Leased Proof of Stake
- Proof of Authority
- Proof of Burn
- Delegated Proof of Stake
- Hybrid PoW/PoS consensus.
Today, consensus algorithm does not support digital money system but allow developers to run codes in a distributed network. Of all these types of consensus algorithm, Proof of Work remains the most used and dominant consensus algorithm.
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For the purpose of this homework, I will limit myself to on only Proof of Burn.
PROOF OF BURN
Generally speaking, Proof of Work and Proof of Stake are the most used systems in the blockchain network. However, Proof of Burn (Proof of Burn) is being regarded as the authentic alternative to PoW and PoS. The concept of Proof of Burn (PoB) was proposed by Iain Stewart. There are many versions Proof of Burn but the type developed by Iain Stewart was the most acknowledged within the cryptocurrency space. Proof of Burn has the same look with that of Proof of Work algorithm which reduces the rate of how energy is been consumed. Proof of Burn does not concerned itself with powerful mining hardware. Rather, Proof of Burn are burned as a way to invest resources in the blockchain. The reason for this is because,miners will not be required or allowed to invest resources physically. Thus, miners are required to invest mining when it comes to Proof of Burn. At this stage, users are allowed to demonstrate and pay attention to their commitment to the network by mining and validating transactions. The benefit of burning coins by a user is that, the More coins a user is able to mine, the more mining power that user has and the user also has the chance to be selected as the next blockchain validation.
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HOW DOES PROOF OF BURN WORK?
Proof of Burn works by burning coins sent to the public address for verification wherein they become inaccessible. These addresses are selected at random without recourse to any private key. The resultant effect of burning coins is that, it reduces the market availability and create a scarcity in the economy which increases it's value. In Proof of Work, blockchain are secured in that,the miners need to invest alot of resources in order to have profit. This is in totality is not different from Proof of Work, where the ideas are similar. Instead of investing in labour work, electricity,etc, Proof of Burn are secured by investing in coins burned. There are different ways in which Proof of Burn consensus algorithm can be executed. Some projects are executed by burning of bitcoins while others are achieve consensus by burning their own native coin.
ADVANTAGES OF PROOF OF BURN
- It reduces power consumption
- Coins are burned virtually rather than physical mining.
- It reduces the security in the market.
DISADVANTAGES OF PROOF OF BURN
- The process of burning coins are not transparent and users find it difficult to verify.
- It is very slow. This means that,it not as fast as in Proof of Work.
CONCLUSION
Thanks to our crypto-professor @alphafx, @steemcurator01,@steemcurator02 and @steemitblog for the encouragement, enlightenment, motivation and support.