Jeff Hu


Blockchain Virtual Mining: Proof-of-Anything

What’s the difference between Proof-of-Work, Proof-of-Stake, Proof-of-Burn and other Proof-of-Xs?

Globe of Blockchain — from


Recently, as the flaws of Proof-of-Work(PoW), the consensus algorithm employed by Bitcoin, grow harder to disguise. Various alternatives such as Proof-of-Stake(PoS), Proof-of-Burn(PoB) and many of them emerged, contriving hard to take over their ancient precursor, PoW.

This swift guide is about to introduce several popular Proof-of-Something(PoX) to you from the shallow view of outsiders. First thing first, let’s welcome our main actor to the stage— Consensus Algorithm.

Consensus Algorithm: Anyone can create blocks, but this algorithm makes all of us agree on a single trustful state of blockchain, without the need of trusting each other or a third party authority.

To achieve the consensus within the network, everyone needs to sacrifice something, or some valuable resources.

Proof-of-Work (PoW)

  • Sacrifice: Electricity (computational power).
  • Participant: A miner who has a machine that can run SHA-256 on the blockchain network.
  • How: A miner utilize the machine to solve extremely difficult math puzzle, and generate mining reward from it.
  • Why: The math puzzle validates the transactions that happened on the network, and stores them in the chain, block by block. This keeps the chain trustful and hard to change. [Detail]
  • Players: Bitcoin, Ethereum(moving to PoS), and a whole lot of others.

Proof-of-Stake (PoS)

  • Sacrifice: Coin Days (The value that accumulates when holding coins).
  • Participant: Anyone who hold coins.
  • How: Someone who holds 1 coin for 1 day will get 1 Coin Day, which can be used to generate coins.
  • Why: The people who holds more coins for more days has higher collateral, who can vouch for the validation of transactions. These people reasonably has higher tendency to keep the chain honest.
  • Players: Peercoin, Blackcoin. [More]

Proof-of-Burn (PoB)

  • Sacrifice: Coin.
  • Participant: Anyone who has coins (and can suffer the pain of burning them).
  • How: Someone who sends their coin to an unspendable address.
  • Why: Similar to PoS. The burnt coin were generated from PoW-mined coins (or fuels). It prevents the possibility of inflation by burning coins.
  • Players: Slimcoin, TGCoin (Third Generation Coin)

Proof-of-Importance (PoI)

  • Sacrifice: The importance of the user (calculated from the number of transaction the user made, plus the coins the user hold)
  • Why: Not only the passive coins hold, but also the active transaction history is captured. Encourage user’s contribution to the network.
  • Player: NEM

Proof-of-Stake-Velocity (PoSV)

  • Sacrifice: The stake(the amount of coins hold) and velocity(the frequency of making transaction).
  • Why: Similar to Proof-of-Importance.
  • Player: Reddcoin

Proof-of-Capacity (PoC)

  • Sacrifice: Disk storage or memory.
  • Participant: Anyone who has storage space.
  • How: Someone allocates a usable and non-trivial storage space that used to solve math puzzles.
  • Why: No need for high computational power, anyone can mine coins at home as long as they have sufficient spare space for mining.
  • Player: Burstcoin

Proof-of-Deposit (PoD)

  • Sacrifice: The freedom to use coins.
  • Participant: Anyone.
  • How: The control of disbursement will be removed for a period of time.
  • Why: The economical purpose is similar to PoS and PoB. To fuel blockchain, some internal resources are required to be sacrificed.
  • Player: None so far.


Thank you for your time. Hope you enjoy this article. :)

Feel free to point out any mistake or provide any suggestion. I wish to learn from you as well. Thanks!

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