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Proof-of-Burn (PoB)

By CoinGecko | Updated on Mar 03, 2020
On a technical layer, Proof of Burn performs block validation in the same way as Proof of Work, whereby the chances of a miner to mine a block depends on the resource they have commit to increase its mining speed. However, whereas Proof of Work gives better chances to miners with more mining power, Proof of Burn consensus allows miners to burn a coin/token to obtain the rights to better chances. Ergo, burning coins lets miners buy "virtual mining rigs" to improve their odds of mining block. The Idea behind proof of burn is to address the intensive energy usage in Proof of Work consensus algoritm by allowing miners to also spend intensive resources to prove a miner's commitment

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Related Terms

Cloud Mining
Mining on blockchains through rented processing power rented from companies that host the physical equipment.
Non-Fungible Tokens (NFT)
They are collectible elements within the Ethereum blockchain under ERC-721, where each token refers to a single element with a certain value
Cold Wallet
Wallets that are offline and require physical access to certain devices (eg. hardware wallet, paper wallets)
Directed Acyclic Graph (DAG)
Directed acyclic graphs refers to a data structure that is built in one single direction, yet branches out and never repeats.
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