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
Related Terms
Token Generation Event (TGE)
An event in which new tokens (ussually on a smart contract platform) are created and distributed to the public.
Ponzi Scheme
A Ponzi scheme is also referred to as pyramid scheme, and typically takes the form of an investment scheme which pays existing investors with funds collected from new investors.
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
Bounty
Public tasks available for anyone for a reward
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