What Is Proof-of-Burn (PoB)?
Proof-of-Burn (PoB) is a consensus algorithm used in cryptocurrency networks to achieve distributed consensus. It works by having miners burn or destroy coins as proof of their commitment to the network, and then receive rewards for doing so. This process helps secure the network and prevents double spending. The burning of coins also serves as an incentive for miners to remain honest and not cheat on the system.
The PoB protocol requires that miners send some amount of tokens from one address to another unspendable address, thus destroying them forever. In return, they are rewarded with newly created tokens which can be used within the blockchain ecosystem or exchanged for other cryptocurrencies like Bitcoin or Ethereum. By burning these tokens, it creates scarcity in supply which increases demand and drives up prices over time – making it attractive for investors who want to benefit from price appreciation without actually buying any assets directly.