What Is Proof of Burn (PoB)?

What Is Proof of Burn (PoB)?

Proof of Burn is a novel consensus algorithm that presents a more sustainable alternative to Proof of Work. It involves burning coins to invest resources in the network, creating a permanent economic scarcity of coins, and reducing their circulating supply. It requires validators to destroy their coins, contributing to the security of the network. While there are still debates and controversies regarding the advantages and disadvantages of PoB, it has the potential to promote decentralization and encourage long-term commitment. However, more testing is needed to confirm its efficiency and security, and concerns remain regarding eco-friendliness, verification delays, and transparency.


The majority of Blockchain systems utilize either Proof of Work (PoW) or Proof of Stake (PoS) consensus algorithms. However, Proof of Burn (PoB) is currently being tested as a potential alternative. Consensus algorithms are responsible for securing the network and verifying transactions.

In a PoW blockchain like Bitcoin, miners compete to solve a cryptographic problem. The first miner to find a solution broadcasts their proof of work (block hash) to the network. Nodes verify the proof, and if it's valid, the miner can add the block to the blockchain and receive newly generated Bitcoins as a reward.

PoS blockchains use digital signatures to prove coin ownership, and block forgers or minters validate new blocks. Forgers with more coins at stake have a higher chance of being selected as block validators. PoS systems usually do not offer block rewards, and minters only receive transaction fees.

PoB has similarities to PoW and PoS but has a unique way of reaching consensus and validating blocks.

Proof of Burn

Proof of Burn is a sustainable alternative to Proof of Work that doesn't require the use of powerful computational resources or mining hardware like ASICs. There are different versions of PoB, but the concept of PoB idealized by Iain Stewart is the most recognized in the crypto space.

In PoB-based networks, cryptocurrencies are intentionally burned to invest resources in the blockchain. Miners invest not in physical resources but in virtual mining rigs or virtual mining power. By performing coin burns, users demonstrate their commitment to the network and gain the right to validate transactions. The more coins a user burns, the more mining power they have and the higher their chances of being chosen as the next block validator.

PoB is similar to PoW, but it implies reduced energy consumption. The block validation process in PoB-based networks doesn't require powerful computational resources, making it a more sustainable alternative to PoW. Instead, users burn coins to invest in the network, gaining virtual mining power and the opportunity to validate transactions.

Understanding the Mechanism of Proof of Burn

The Proof of Burn consensus algorithm is a way to secure blockchain networks without requiring the use of powerful computational resources. Instead, crypto coins are intentionally burned as a way to "invest" resources in the blockchain, making it a more sustainable alternative to Proof of Work.

The process of burning coins consists of sending them to a public address where they become inaccessible and useless. These eater addresses are randomly generated without having any private key associated with them. By reducing market availability and creating economic scarcity, coin burning potentially increases the value of the remaining coins.

Proof of Burn also creates an investment in the security of the network. PoW blockchains require significant investment to be profitable, creating incentives for miners to act honestly and help the network to prevent initial investments from being wasted. Similarly, PoB blockchains are supposed to be secured by the investment made through coin burns alone.

PoB blockchains provide block rewards to miners, and over time, these rewards are expected to cover the initial investment of the burned coins. There are different ways of implementing the Proof of Burn algorithm, including burning Bitcoins or a project's native coin.

Proof of Burn vs Proof of Stake

Both Proof of Burn and Proof of Stake consensus algorithms require block validators to invest their coins in the network. However, there is a key difference between the two. In PoS, forgers must stake their coins by locking them up, but they can take them back and sell them in the market if they decide to leave the network. As a result, there is no permanent market scarcity of coins in such a scenario. In contrast, in PoB, validators have to destroy their coins completely, which creates a permanent economic scarcity of coins. This is because the coins are sent to an eater address which makes the coins inaccessible forever.

Advantages and Disadvantages of Proof of Burn


  • More sustainable: Compared to Proof of Work, PoB has reduced energy consumption since it does not require powerful computational resources and mining hardware like ASICs.
  • No need for mining hardware: PoB networks use coin burns as virtual mining rigs, so there is no need for physical resources.
  • Reduced circulating supply: Coin burns reduce the number of available coins in the market, creating an economic scarcity that may potentially increase the coin's value.
  • Encourages long-term commitment: PoB requires validators to burn their coins, which demonstrates their commitment to the network and encourages them to act honestly to prevent their initial investment from being wasted.
  • Increases decentralization: PoB tends to promote a more decentralized distribution of coins and mining power.


  • Eco-friendliness concerns: Some critics argue that PoB is not eco-friendly because the coins being burned are generated through PoW mining, which requires lots of resources.
  • Limited testing: PoB is a relatively new consensus algorithm, and more testing is needed to confirm its efficiency and security, especially at larger scales.
  • Verification delays: The process of verifying the work done by PoB miners may not be as fast as in PoW blockchains.
  • Transparency concerns: The process of burning coins may not always be transparent or easily verifiable by the average user.


While Proof of Work and Proof of Stake remains the most widely used consensus algorithms in blockchain systems, Proof of Burn is a potentially sustainable alternative that requires less energy consumption and physical resources. PoB relies on burning coins to invest resources in the network, creating a permanent economic scarcity of coins and encouraging long-term commitment from validators. However, PoB is still being debated, and further testing is needed to confirm its efficiency and security at larger scales. While there are advantages to PoB, such as increased decentralization and reduced circulating supply, there are also concerns, such as eco-friendliness and transparency issues. Overall, PoB offers a unique approach to securing blockchain networks, and its potential benefits and drawbacks should be considered when evaluating its implementation in future blockchain systems.

Proof of Burn
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