I have been trying to make a comparison between PoW, PoS and Proof of Burn. While I understood the other two, I want to know how exactly Proof of Burn helps in attaining the consensus.

One burns coins by sending it to an address where it cannot be spent, is what I understood.

  1. But why would one "burn" the coins? Isn't it a loss for the person burning or getting rid of some coins?
  2. How is the consensus achieved for the next block in the chain?
  3. How is it beneficial in comparison to PoW and PoS?

My apologies, I have read a lot about Proof Of Burn but I am still not able to comprehend.

  • Do you recieve any different transaction fee for the transaction heading to be burned? Commented Sep 24, 2017 at 11:18

3 Answers 3


Attention: Ambiguity!

Note that the term (or abbreviation) "PoB" can be used differently. For example, some cryptocurrencies allow users to get some of their coins for provably burning money in Bitcoin, essentially deriving their values from Bitcoin's value by deriving their scarcities from Bitcoin's scarcity.

Yeah, but what about my question?

The idea behind these consensus strategies should be pretty obvious: Find something that:

  • is hard to do.
  • is easy to verify.
  • enforces a linear history.

PoW is trivial, you know it of course: Find a hash that's smaller than a given value.

PoB can be done in such a way that you send out a transaction which burns some of your money. If you burn the most (possibly combined with other criteria, a lot of proposals factor age of the coins in; not necessarily much of your money), you win. Others will mine (I use the word "mine" because "burn" could lead to confusion.) on top of your block. You, yourself, can take transactions of other miners burning their coins and add them to your block, meaning that you burn their coins if you win. Of course, you need a way of others telling you your transactions. Sounds hard at first, I mean why would they give you transactions to put into your block, burning their money. However, it's pretty obvious why they would to this: It's necessary to tell others about the transactions burning their money in order to propagate their block. So you receive blocks burning other miner's money, try to burn your own money on top of that block's parent, burning that other miner's money, too. If your block burns the most money, you win and get the block reward.

PoS, on the other hand, tries a lottery approach. There is a certain amount of money at stake and the bigger your share of that money is, the higher your chances of winning. It's like lining the coins of everyone up, say, there are n coins in total, all numbered from 1 to n. Then, a random number r ∈ [1, n] is drawn. The owner of coin r wins and gets the block reward and possibly the money the others risked (or it's burned, or something else).

PoS can use PoW to draw that random number. For example, whoever gets the lowest hash h of the previous block + a nonce until a certain point in time gets a minor reward. Then, r := (h mod n) + 1.

Of course, these are just the basic concepts + examples. There are a lot of variations and everyone has an idea which according to them is better than the previous ones. The above should, however, make the differences clear. If it didn't work out to do this in so little text, feel free to ask or read it up in the Bitcoin wiki:


Think of the burning Bitcoin to create XCP in such a way: You take $1,000 of 20 dollar bill to the US Treasury Department, and US Treasury Department burns it, and mints 250 notes of 4 dollar bills for you.

  • And then you realize that 4 dollar notes don't exist so they must be counterfeit? Commented Jun 26, 2020 at 17:16

With proof of burn, instead of pouring money into expensive computer equipment, you 'burn' coins by sending them to an address where they are irretrievable. By committing your coins to never-never land, you earn a lifetime privilege to mine on the system based on a random selection process. the more coin you burn more chance to mine the block.this is being served as the alternative for proof of work but it also using unnecessary resources and mining will be more favoured to those who burn more coin.

proof of burn is being followed in slimcoin which is based on peercoin.

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