bitcoin in front of computer in article about proof of burn
Here's something a little different for miners. (Photo by André François McKenzie on Unsplash)

Understanding Proof of Burn

If you don’t have the necessary hardware, see this alternative to validating blockchain transactions.

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bitcoin in front of computer in article about proof of burn

If you don’t have the necessary hardware, see this alternative to validating blockchain transactions.

Blockchains have a wide range of algorithms that they use, with the common ones being proof of stake and proof of work. However, there is a new kid on the block that is being tested as an alternative to the consensus algorithms that are already in existence. The main purpose of the algorithms is to ensure that the blockchain networks are secure for validating all transactions. There are some similarities that proof of burn shows with the PoW and PoS; however, it is a unique system on its own and has a different approach to validating blockchain transactions. This article will expound on this issue in detail.

What Is Proof of Burn?

When you look around, you may come across a wide range of proof of burn models. However, Iain Stewart’s concept is the one that is currently being used on cryptocurrency blockchains. This shows signs of being a sustainable alternative to the proof of work consensus. The general structure of the PoB is similar to that of PoW, with the main difference being that it requires less energy. Essentially, the process of validating blocks using the proof of burn algorithm does not take up a lot of energy resources.

Unlike PoW, you will not need powerful hardware and equipment for mining. This model works by burning cryptocurrencies so that they can invest resources in the network. As such, the miners will not need to invest so much on physical resources. This algorithm allows miners to use virtual mining power. Users will show their commitment to a blockchain by burning their coins. When this happens, they will have a right to verify and validate transactions on the network.

Proof of burn requires miners to burn coins and as such, for you to get more mining power, you will need to burn more coins on the network. This is a sign of dedication to the network and will increase your chances of becoming a block validator.

How Proof of Burn System Works

Burning is a process through which coins are rendered useless and inaccessible. This is done by sending the coins to a public address, which is verifiable. Such addresses are generated randomly and are known as eater addresses — you can read more about these addresses in this detailed article. When coins are burned, there is a scarcity created as they are no longer available on the market. Ultimately, this causes an increase in the value of the coins. Burning coins is a form of investment in a network.

Proof of work is where a miner invests a lot of resources on a network and will get rewarded. Such miners have incentivized and will work in an honest manner in validating blocks.  With proof of burn, the concept is still the same as miners are required to invest. However, with PoB, the investment is in the form of burning coins.

After a certain period of time, miners will get rewarded and they will recover the initial investment of the coins that they burned. Most blockchains accept the burning of Bitcoin as an investment. Moreover, there are others that will allow the burning of their native coins by potential miners. Similar to the other consensus algorithm mechanisms, proof of burn has its pros and cons. However, this is considered to be the less intensive investment on a blockchain network.


Bitcoin is known to use proof of work as the main form of consensus, which requires a lot of physical resources. Proof of burn is a better alternative because you can easily burn coins on a network and gain access to become a miner. It is advisable to consider all the options and information before making a decision.

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