Proof-of-Capacity (PoC) and Proof-of-Commitment (PoC+) are blockchain consensus mechanisms that make mining more convenient for everyday use.
Blockchain networks use consensus mechanisms to validate and confirm transactions. The two most common ones you’ll encounter are Proof-of-Work (PoW), which is used by Bitcoin, and Proof-of-Stake (PoS), used by Ethereum. Each has its benefits, but there are also downsides. For instance, PoW uses a lot of energy and this makes it impractical for everyday use. PoS, on the other hand, tends to favor validators with more financial resources. This can lead to centralization.
To solve these challenges and create a blockchain that is more secure and sustainable, Signum (formerly known as the BURST network) introduced two innovative consensus mechanisms: Proof-of-Capacity (PoC) and Proof-of-Commitment (PoC+).
In traditional Proof-of-Work systems, miners compete to solve complex cryptographic puzzles to add new blocks to the blockchain. This process demands a lot of energy and requires specialized, costly hardware that not everyone can afford. Proof-of-Capacity (PoC) offers you a different approach.
Instead of performing energy-intensive calculations, PoC allows you to store precomputed cryptographic data, called plot files, on your hard drive. When the network randomly selects a value, you simply check your stored plot files to find the closest match. If your stored data has the closest match, you get to add the new block to the blockchain and earn rewards.
The amount of rewards you earn depends on how much storage space you allocate for mining. The more space you dedicate, the more data you can store, and the more data you have, the higher your chances of finding the correct value and successfully mining a block.
One of the best parts of PoC is that it doesn’t require expensive hardware. You can use a standard PC or even a smartphone to start mining. However, PoC isn’t perfect. The plot files you store aren’t unique to any single blockchain, meaning other blockchains could copy the system and reuse the same files to run their networks.
To address PoC’s limitations, Signum developed an upgraded system called Proof-of-Commitment (PoC+). It combines features of PoC and PoS, giving you more flexibility.
In PoC+, your mining rewards still depend on how much storage space you allocate. But you can boost your chances by staking some of your crypto. This gives you two ways to increase your mining success: either add more storage space or stake more coins.
If you don’t stake any coins, your effective capacity will be below average, and you will have less chances of mining the next block. If you choose to stake more coins than the network’s average, your effective capacity increases, and you have greater chances of earning rewards. To keep things fair, the network constantly adjusts the average staking requirement to prevent any single group from dominating.
PoC and PoC+ make blockchain mining more accessible to everyday users. Instead of needing specialized equipment, you can mine cryptocurrency using regular devices like your laptop or phone. Even better, the data you store for mining can be deleted later, and you can reuse your device for other tasks. This makes PoC and PoC+ more cost-effective, eco-friendly, and accessible.
