Proof of Burn

Proof of Burn is a consensus mechanism proposed as an energy-efficient alternative to Proof of Work. Burning coins is analogous to purchasing mining equipment — you spend real economic value to gain the right to participate in consensus.

**How PoB works:** - Miners send coins to a verifiably unspendable address (burn address) - The burn is permanently recorded on the blockchain - Mining power is proportional to the amount burned - Over time, burned coins "decay" — old burns have less weight than recent ones

**Variants:** - **Burning the native coin**: Miners burn the same asset they're mining (Slimcoin model) - **Burning external coins**: Burn one cryptocurrency to bootstrap another (e.g., Counterparty burned Bitcoin to launch XCP)

**Advantages over PoW:** - No ongoing hardware and electricity costs - Energy-efficient consensus - Creates real economic cost without physical waste

**Disadvantages:** - Burning destroys capital that could be deployed elsewhere - Creates an initial advantage for early participants who bought at lower prices - Less battle-tested than PoW or PoS - Potential for "nothing at stake"-like problems

**Real-world use:** Proof of Burn has been used by Slimcoin and Counterparty. It remains a niche mechanism and has not been adopted by major blockchains. The concept of burning tokens has, however, become central to many tokenomics models (buy-and-burn, EIP-1559 base fee burning) even outside consensus mechanisms.