Can someone explain me:

  1. What is Proof of Burn
  2. What is the difference between Proof of Burn and Proof of Work
  3. How Proof of burn works
  4. Which virtual currency uses Proof of burn technology instead of Proof of Work

Can someone explain these things to me in a understandable manner? I can't understand anything in the (Wiki article on it). Highly appreciate if someone can explain this to me.

  • 2
    Since you want us to evaluate and explain an external resource for you, could you at least provide a link to it?
    – Murch
    Commented Apr 1, 2014 at 12:36
  • en.bitcoin.it/wiki/Proof_of_burn
    – tdumidu
    Commented Apr 1, 2014 at 13:26
  • Can someone explain me about this?
    – tdumidu
    Commented Apr 1, 2014 at 18:46
  • 3
    The purpose of Proof-of-Burn is not to generate coins (as PoW and PoS do), but rather to verifiably destroy them. What for? To "transfer" your crypto-wealth from one coin to another whilst forcing everyone to be honest. The old coins are transferred to an address whence noone could use them, neither original owner nor creator of new coin.
    – Joe Pineda
    Commented Apr 2, 2014 at 1:02

2 Answers 2


Proof of burn simply means you have provably destroyed coins. The only way to destroy coins in a proven way is to send them to an address which is improbable to have been generated from a private key, and thus can not be spent.

Chancecoin is the first I've seen to use this way to generate their coins. The announcement for Chancecoin can be found here: https://bitcointalk.org/index.php?topic=528023.0

In here, they instruct people can burn bitcoins for a certain period by sending them to 1ChancecoinXXXXXXXXXXXXXXXXXZELUFD. The reason why we believe that this is a burn address and not a vanity address is that all but 6 characters seem to have been predetermined. The way you would find an address like this which you could send coins to is by running a loop.

  1. Start with 1ChancecoinXXXXXXXXXXXXXXXXXXXXXXX
  2. Ask bitcoin if that's a valid address
  3. If it's not valid, increment the last character by one and try again

After a billion or so tries (not too much in terms of 'mining') address 1ChancecoinXXXXXXXXXXXXXXXXXZELUFD is found which passes the validity check. For more info on address validity see: https://bitcointalk.org/index.php?topic=1026.0

This address is very unlikely to have been generated with a private key, or if so, it would show a big weakness in bitcoin and many other security practices. So we assume that the nobody has access to this private key.

  • "to an address which is improbable to have been generated from a private key" IIRC it was possible for some kinds of valid addresses, to prove that no private key could generate them. This would be a bit safer than this "improbable" approach, however good it is.
    – o0'.
    Commented Jun 12, 2014 at 15:04
  • Lohoris, I have never heard of this. Could you please provide an explanation to your claim?
    – Mark
    Commented Jun 13, 2014 at 15:15

Proof-of-Burn addresses are pretty easy to generate. Assuming a cryptocurrency is derived from bitcoin, and uses the base58 protocol, one can generate an address that is obviously a burn address visually. I just generated this: zCoinBurnAddressDestroyedXXXVyY865 - /z CoinBurnAddressDestroyedXXX / VyY865. The last part "VyY865", is a Python Base58 and Base58Check implementation template and is the safeguard, and no private key was generated by the Base58Check. See Python Software Foundation

You have to combine that with your own simple template, though.

  • This isn't an explanation. OP asked for one.
    – UTF-8
    Commented Oct 12, 2016 at 22:40
  • It was established what Proof of Burn is. It would be silly to reiterate the above. Nonetheless, I gave the OP and Google, insight into question 3.
    – coinburn
    Commented Oct 13, 2016 at 2:21

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