Proof of capacity (PoC) is a strong consensus mechanism that allows blockchain nodes to mine cryptocurrency using the free space on their hard drives. In this article, we would be digging deeper into the Proof of Capacity(PoC), and we would be looking at how it works, as well as its advantages and disadvantages.
What is Proof of Capacity (PoC)
Proof of capacity (PoC) is a blockchain consensus mechanism technique that allows mining devices in the network to leverage their available hard drive space to decide mining privileges and validate transactions.
It operates by keeping a list of potential solutions on a miner’s hard drive before mining begins. The more storage space a miner has, the more likely it is that the requisite hash value will be found in the list. The miner’s odds of earning the mining reward improve as a result.
Understanding Proof of Capacity (PoC)
Proof of capacity allows mining devices, also known as nodes, on the blockchain network to mine accessible bitcoins using the free space on their hard drive.
Instead of continually changing the integers in the block header and hashing for the solution value like in a PoW system, PoC works by keeping a list of possible solutions on the mining device’s hard drive before mining begins.
The larger the hard drive, the more alternative solution values one can store on the hard drive, and the more possibilities a miner has of matching the needed hash value from his list, and therefore more chances of winning the mining reward.
To provide an illustration, if lottery prizes are determined by matching the most numbers on the winning ticket, then a player with a broader variety of viable answers will have a greater chance of winning. Additionally, the player is permitted to use the lottery ticket block numbers repeatedly.
Burstcoin is a cryptocurrency that operates on the proof of capacity concept. Storj, Chia, and SpaceMint are among the coins that use it.
How Proof of Capacity (PoC) Works; Plotting and Mining
The proof of capacity protocol is composed of two steps: plotting and mining.
The hard drive is first plotted: a list of all possible nonce values is generated by repeated hashing of data, including a miner’s account. Each nonce has 8192 hashes ranging from 0 to 8191. All of the hashes are paired into “scoops,” which means that nearby hashes are joined to make a pair of two. For example, hash 0 and 1 make up scoop 0, hash 2 and 3 make up hash 1, and so on.
The second stage involves actual mining, during which a miner computes a scoop number. For example, if a miner starts mining and creates scoop number 38, the miner would then go to scoop number 38 of nonce 1 and utilize the data from that scoop to calculate a deadline value.
The method is repeated for each nonce stored on the miner’s hard drive to calculate the deadline. Following the computation of all deadlines, the miner chooses the one with the shortest deadline.
A deadline is the amount of time in seconds that must pass after the last block was produced before a miner may forge a new block. If no one else has forged a block during this time frame, the miner may do so and receive the block reward.
For example, if miner X sets a minimum deadline of 36 seconds and no other miners can forge the block within the next 36 seconds, X will be awarded the opportunity to forge the next block.
Proof of Capacity (PoC) Examples
At the moment, Proof of capacity is used in:
- Permacoin: This coin uses Bitcoin’s PoW with a simple, more useful task: Providing strong, distributed storage to its miners.
- SpaceMint: This also uses a consensus mechanism based on the non-interactive version of PoC, in which participants generate and commit to a hard-to-pebble graph.
- Burstcoin: This is a mining system that uses free space on your drive instead of draining your GPU and CPU power. Any user can mine with the same chances since hard disks are affordable and easy to find.
Pros and Cons of Proof of Capacity
PoC has several advantages over PoW and PoS systems, as well as some important disadvantages that include:
- PoC can use any regular hard drive including those with Android-based systems.
- It is reportedly up to 30 times more energy efficient than the ASIC-based mining of the bitcoin cryptocurrency.
- There is no need for dedicated hardware or constant upgrading of hard drives.
- Mining data can be easily wiped-off and the drive can be reused for any other data storage purpose
- Not many developers have adopted the system.
- It can be difficult to generate a large list of hashes for the header values.
- If a node drops out of the network, it can take some time to rebuild the plot files.
- It is possible for malware to affect mining activities.
- Widespread adoption of PoC could start an “arms race” to produce higher-capacity hard drives.