Proof of Burn (PoB) in Blockchain

Proof of Burn (PoB) in Blockchain

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Updated on Dec 27, 2023 18:13 IST

Proof of Burn in the blockchain is a consensus algorithm that allows miners to add their block by sending some of their coins to an unspendable account. Let's understand more!


We’ve previously discussed several renowned consensus algorithms like proof of work (PoW), Proof of Stake (PoS), Proof of Capacity (PoC), and many more. Today we picked up the Proof of Burn (PoB) consensus mechanism in Blockchain.

The Blockchain network uses a consensus mechanism to ensure that all participants agree to a new update on the network. Such as adding a new block of transactions to the network, deciding the network rights, etc. Therefore, to ensure the continuity of the network algorithm needs to be established. 

Let’s begin with our focused algorithm, Proof of Burn (PoB).

Table of Content

What is Proof of Burn (PoB)?

In the Proof of Burn (PoB)  algorithm, miners reach a consensus by burning the coins. It’s a process in which crypto coins get permanently eliminated from regular circulation. In such cases, the burning of coins mechanism is used to validate transactions. Hence, the more coins a miner burns, the higher the chances of adding the block to the network. 

In comparison to the proof of Work (PoW) system, PoB reduces energy consumption. Moreover, compared with proof of stake (PoS) systems, PoB doesn’t need miners to stake coins to add a new block to the network.

There are various versions of Proof of Burn in blockchain, with the most acknowledged version being Iain Stewart’s algorithm. He’s also the inventor of the Proof of Burn consensus mechanism.

Here, the concept of “burning the coins” means investing the native coins in virtual mining rigs (mining powers). It allows miners with the most virtual mining rigs or a miner who invested the most coins – to add his new block of transactions to the network. Hence, the number of burnt coins shows miners’ commitment to the network. 


Let’s see how the proof of burn consensus algorithm in the blockchain works?

How does the PoB Algorithm work?

First, let’s begin with how do the miners burn the coins?

Here, the miners transfer some amount of coins to an unspendable address or an escrow account. These publicly verified unspendable accounts are randomly created with no private keys associated. Once coins get received by burn address/accounts, it becomes useless and inaccessible. Eventually, the burnt coins in the account are used for strengthening the security of the network. 

Let’s take an example to understand the working of proof of Burn (PoB)?

We have 6 miners, each having their own block of transactions. As per the process, the miners have to burn some amount of coins to get an opportunity to add their block to the network. 

See the below diagram. Each miner sends some of their coins to the burn address or unspendable escrow account.


John wins as he burns the maximum number of coins. Hence, he gets the chance to add his block of transactions to the network. 

Moreover, the block added by John will be verified by other network validators. If the block is found invalid, then the second-highest (Ross) gets the chance to add a new block.

Wouldn’t this approach be unfair for early adopters in the network?

Proof of Burn in blockchain promotes the periodic burning of coins to avoid partiality among new and old network participants. It means the virtual power of mining reduces each time a new block gets mined. Moreover, it motivates miners to make regular transactions instead of just one-time investments. 

Now let’s jump to the pros and cons of using the PoB approach.

Benefits of PoB

Following are the advantages of Proof of Burn in blockchain:

  • Less power and energy consumption.
  • Motivates miners to make regular transactions using cryptocurrency.
  • PoB is more sustainable and doesn’t need hardware for heavy computation.
  • Used for long-term commitments

Limitations of PoB

Following are the disadvantages of Proof of Burn in blockchain:

  • It’s not an initial consensus algorithm. It requires a number of wealthy participants to burn their coins in the network. 
  • PoB has not been proven to be applied on massive networks.
  • It takes more time to validate the block of transactions. Hence, a bit slower mechanism.


The above article covered the details of the proof of Burn (PoB) mechanism. It also covered the working of PoB and how it is better than popular consensus mechanisms like PoW and PoS. Moreover, it goes through the pros and cons of the PoB algorithm.


What is the Consensus Mechanism?

The consensus mechanism helps network participants decide the subsequent global change (like adding a new block of transactions) in the network.

What is proof of work (PoW)?

Proof of Work (PoW) in the blockchain is a consensus mechanism that lets miners add a new block to the network based on the computation done to find the perfect hash.

What is proof of stake (PoS)?

Proof of stake is a consensus mechanism used to decide the next global change in the network. It uses a staking mechanism where participants lock up some of their coins to get selected.

What are the other blockchain consensus?

Some alternative consensus protocols include Proof of Work (PoW), Proof-of-Stake (PoS), Delegated Proof-of-Stake (DPoS), Proof-of-History (PoH), Proof-of-Authority (PoA), Proof-of-Importance (PoI), Proof-of-Elapsed-Time (PoET), Proof of Capacity (PoC) and many more.

What blockchains use the proof of burn (PoB) mechanism?

Slimcoin, counterparty, and Factom use the Proof of Burn algorithm.

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