While most blockchain systems employ either a Proof of Work (PoW) or a Proof of Stake (PoS) consensus method, the Proof of Burn (PoB) approach is being studied as an alternative.

In general, the blockchain consensus algorithms are in charge of keeping the network safe as well as verifying and confirming transactions.

Proof of Work Mining on a blockchain, like the one used by Bitcoin, generates a competitive environment where miners try to solve difficult cryptographic puzzles. The network as a whole receives the block hash, which is the proof of work that the first miner to solve a certain block provides. That proof’s validity will subsequently be confirmed by the dispersed network of nodes. Assuming the block is legitimate, the miner receives freshly created Bitcoins in addition to the authority to permanently add them to the chain.

The consensus process operates differently on Proof of Stake blockchains. Digital signatures that verify currency ownership are used by the Proof of Stake (PoS) method in place of hash functions. Block forgers, also known as minters, are randomly selected individuals who validate new blocks. The likelihood that a forger will be selected as a block validator increases with the amount of coins they are risking. However, most PoS systems do not offer block rewards, unlike PoW systems; instead, a minter receives transaction fees in exchange for verifying a block.

Proof of Burn offers a unique method of gaining agreement and confirming claims, despite some similarities to Proof of Work and Proof of Stake.

Proof of Burn (PoB)

There are several variations of Proof of Burn (PoB), but Iain Stewart’s version is arguably the most well-known in the Bitcoin community. In comparison to the PoW consensus method, it was suggested as a more sustainable option.

Proof of Burn is essentially an algorithm that resembles Proof of Work but with lower energy consumption rates. Strong computing resources and robust mining gear (such as ASICs) are not needed for the block validation process of PoB-based networks. Rather than requiring potential miners to commit tangible resources, cryptocurrencies are purposefully burnt as a means of “investing” resources in the blockchain. The miners in PoB systems put money into virtual mining rigs, also known as virtual mining power.

Proof of Burn (PoB)

In other words, by coin burns, individuals may prove their dedication to the network and earn the privilege to “mine” and verify transactions. Because burning coins symbolizes virtual mining power, the more coins a user burns for the system, the more mining power that user possesses and, consequently, the greater the likelihood that the user will be selected as the next block validator.

How does Proof of Burn work?

In a few words, burning coins entails sending them to a publicly verifiable address, where they become unreachable and worthless. Typically, these addresses (also known as eater addresses) are produced at random without the need for a private key. Naturally, burning coins limits market availability and generates economic scarcity, potentially increasing the value of the currency. More than that, coin burning is another method to invest in network security.

One of the reasons Proof of Work blockchains are safe is that miners must commit significant resources in order to become lucrative. This means that a PoW miner will have every reason to perform honestly and aid the network in order to avoid wasting the initial investment.

The concept is the same for Proof of Burn algorithms. However, rather than investing in electricity, labor, and processing capacity, PoB blockchains are designed to be protected only by coin burns.

PoB blockchains, like PoW blockchains, will pay block rewards to miners, and the rewards are supposed to reimburse the initial investment of the burn coins within a specified amount of time.

Proof of Burn (PoB) Vs Proof of Stake (PoS)

CriteriaProof of Burn (PoB)Proof of Stake (PoS)
 Consensus mechanism Miners burn cryptocurrency to validate transactions.  Validators stake cryptocurrency to validate transactions. 
 Energy efficiency Very energy-efficient. More energy-efficient than PoW, but less energy-efficient than PoB. 
 Security Relatively secure, but less secure than PoW. More secure than PoB, but less secure than PoW. 
 Decentralization Relatively decentralized, but less decentralized than PoW. More decentralized than PoB, but less decentralized than PoW. 
 Cost Relatively expensive to participate in, as miners need to burn cryptocurrency.  Less expensive to participate in than PoB, but more expensive than PoW.

The Advantages and Disadvantages of Proof of Burn

The advantages and disadvantages described here are based on generic arguments advanced by PoB proponents and should not be regarded established facts. There are disagreements concerning these arguments, which require more testing to determine if they are legitimate or invalid.


  • More long-term. Power usage has been reduced.
  • There is no need for mining gear. Coin burns are essentially virtual mining equipment.
  • Coin burning diminishes the circulating supply (scarcity in the market).
  • Encourages miners to make long-term commitments.
  • Coin distribution and mining are less centralized.


  • Some say PoB is not environmentally friendly since the Bitcoins burnt are created by PoW mining, which uses a lot of resources.
  • It has not been demonstrated to work on a bigger scale. More testing is required to guarantee its effectiveness and security.
  • The verification of miners’ work is often delayed. It is not as fast as in Proof of Work blockchains.
  • The process of burning coins is not always clear or easily verified by the common user.


Proof of Burn is an innovative consensus mechanism that offers a unique approach to achieving distributed consensus in blockchain networks. By requiring participants to burn cryptocurrency tokens, PoB encourages commitment and dedication to the network, which can enhance security and prevent centralization. While PoB has its advantages, it is important to consider the potential drawbacks, such as the potential for token value manipulation and the possibility of excluding participants with limited resources. However, when implemented thoughtfully and in combination with other consensus mechanisms, PoB can contribute to the overall security and integrity of blockchain networks.


Q. What is proof of burn stacks?
Proof of Burn (PoB) is a consensus mechanism in blockchain where miners prove their commitment by sending tokens to a verifiably unspendable address, essentially burning them. This process validates transactions and secures the network. Stacks, a blockchain platform, utilizes PoB to mint a native cryptocurrency, STX. This mechanism enhances security and rewards participants, fostering a robust decentralized ecosystem.

Q. What is a proof of burn address?
 A proof of burn address is a concept in cryptocurrency where tokens or coins are intentionally sent to an unusable, ‘burn’ address to demonstrate commitment and reduce the circulating supply. This process involves destroying tokens by sending them to an address with no private key, ensuring they cannot be recovered. Proof of burn can be used to initiate new cryptocurrencies or demonstrate long-term commitment to a project by reducing available tokens and potentially increasing the value of the remaining ones.

Q. What are the benefits of proof of burn?
 Proof of Burn (PoB) is a blockchain consensus mechanism where participants destroy (burn) their cryptocurrency tokens to validate transactions and create new blocks. Benefits include reducing token supply, increasing scarcity, and potentially improving security as participants have a financial stake. PoB can be environmentally friendly, as it doesn’t require energy-intensive mining. However, it may face challenges in terms of adoption and security risks, as it depends on the willingness of participants to destroy valuable tokens.

Q. What is the disadvantage of proof of burn?
 Proof of burn is a consensus mechanism in which participants destroy their cryptocurrency tokens to mine new ones. While it offers a unique way to distribute tokens and reduce supply, a major disadvantage is the irreversible loss of assets. Once tokens are burned, they cannot be retrieved, which may discourage users and investors. Additionally, it doesn’t provide the same security and decentralization as other consensus mechanisms like proof of work or proof of stake.