Proof of Capacity Simplified
If you frequent the crypto-space you’ve probably heard mention of Proof of Work or Proof of Stake. These consensus algorithms are used to guarantee that blockchain transactions happen in a trustless way, so that tokens are spent only once.
Proof of work first came about in the Bitcoin white paper as the first mechanism that allowed consensus among distributed parties with no central authority. Now, we have several solutions to this problem, including the lesser known proof of capacity consensus algorithm used by Sinoc.
But before you can better understand proof of capacity and our practices, let’s take a quick look at the OG. In the PoW algorithm, miners use computers to quickly guess answers to a mathematical equation until someone wins. The miner who guesses the correct solution is rewarded with a token. This is called “mining.” It may seem simple, but the amount of computing time and energy it takes for a mining machine to make thousands or even millions of “guesses” per second really adds up.
How does proof of capacity work?
Proof of capacity emerged as one of the many alternative solutions to the problem of high energy consumption in proof of work. The two are fairly similar, apart from one major difference; rather than doing a large amount of work in order to verify each block, proof of capacity allows you to plot your hard drive, or store possible solutions on your hard drive, before mining begins. This creates an easier, quicker, and more dependable way for miners to solve blockchain puzzles. If your hard drive contains the solution to the equation, you win that block.
What are the benefits?
Not only does proof of capacity require less computing time and therefore less energy used, but it also opens up cryptocurrency mining to anyone with available space on a hard drive. This could be a huge convenience for people who live in areas of the world where their currencies are unstable, allowing them to essentially make cryptocurrency that can be exchanged for any fiat currency.
Proof of capacity also doesn’t require expensive and specialized equipment that miners would need to continually upgrade or repair if they were mining with PoW. Miners would also be hard-pressed to find another application for that PoW mining hardware once they’re done mining. With proof of capacity, you can wipe your hard drive and go back to using it for its originally intended purpose.
While you can definitely use your hard drive for something other than mining when you’re finished mining, that space on your hard drive that’s being used to store potential solutions while you’re mining cannot be used for anything else.
We may also soon run into an issue of finding enough storage space for the algorithms to work properly. Miners will potentially need larger and larger storage systems to be able to compete, even growing to zettabyte level storage space just to stay relevant.
Along with this, because storage space is required, it will be fairly simple for malware to be sent into someone’s storage system to damage, destroy, or steal codes and solutions, which could put huge amounts of information at risk.
Wrapping it up
While proof of capacity hasn’t been widely adopted, it does solve several problems that have surfaced with classic proof of work algorithms. It seems to lean towards a more decentralized community and cuts down on energy consumption, which is pivotal for our Sinoc miners . Only time will tell where proof of capacity will take us.
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