Crypto V.3: Proof Of Capacity
Tags: Cryptocurrency, Bitcoin, Helix, Crypto, Mining

Why Proof Of Capacity?

Energy Efficient

The Proof Of Capacity (PoC) consensus algorithm has been around since 2014, after it was introduced as the base protocol of the Burst blockchain. The resource used to mine blocks of PoC cryptocurrencies is storage space, where miners store pre-computed hashes — plot files. Every time a block is mined, miners read plot files from hard drives, searching for deadlines computed from stored hashes, which is then submitted to the pool or the wallet. The lowest deadline submitted to the network forges the block.

Given that the operation of hard disks requires considerably less energy (5–10 W), the processing on one transaction on the Burst blockchain uses less electricity than the processing of one Bitcoin transaction by several orders of magnitude (~100.000).

Enabling And Promoting Decentralization

As storage space comes with any computer or handheld device, anyone having unused space on their computer, laptop or even mobile phone can create a plot file and start mining a PoC cryptocurrency, without the need to purchase additional devices or equipment.

The electricity consumption of PoC mining is, in fact, so low that running the Scavenger miner on Android mobiles doesn’t impact the user-perceived duration of the mobile’s operation on one battery charging.

Since the PoC consensus algorithm has been deployed, the PoC plot file has been improved from the PoC1 to the optimized PoC2 plot format, by the Proof Of Capacity Consortium (PoCC), an anonymous developer group focused on the development and the improvement of PoC technology. PoC2 is the current standard plot file format for existing PoC cryptocurrencies. The PoCC recently went one step further in optimization of PoC mining, by introducing the revolutionary Helix plot file format, that doubles the effective mining capacity of PoC miners by “compressing” hashes.

Even though the Helix requires a GPU on the mining system, the total energy consumption of the mining process is lower than with HDD-only setup of equivalent capacity. The innovation has been introduced with the intention to “level the playing field” between big-professional miners that operate miners of up to several petabytes and hobbyist-enthusiasts who mine PoC coins with less hardware, and thus slow down or prevent the centralization of mining resources on PoC blockchains.

An another evolutionary step for PoC, the prototype of which has been prepared by the PoCC is the PoC3 plot file format, that allows for data other than hashes to be mined. The PoC3 concept uses individualized plots, that will contain “the knowledge of mankind” — documents, encyclopedic material and files, which PoC miners will be able to mine.

The current efforts regarding PoC3 are focused on creating a list of relevant files to be used for mining in the future. PoC3 mining addresses smaller mining setups, by enabling them to increase the profitability of their mining operation by taking part in this philanthropic project.

Image courtesy of https://starburst.pink/post/scavenger-mining-android/

Accessible To Everyone

The technological improvements that have been and are being introduced into the Proof Of Capacity ecosystem grant access to cryptocurrencies for more people than any other paradigm within the crypto-sphere. Given that the number of mobile phones used across the globe already exceeds the number of people, it is a question of mobile appstore policy changes before running mobile crypto miners is a “normal” thing to do.

With the Helix and PoC3, the entry barrier into the primary cryptocurrency market is also being substantially lowered. Having more holders of cryptocurrencies — increasing the geographical “density” of them actually, is likely to encourage the business adoption of cryptocurrencies as well. If one thinks about it — in case there were 100 crypto-holders in a neighborhood, the owner of the local coffee shop, deli or kiosk would have a greater interest to start accepting crypto as payment than when there’s no more than one or two occasional customers that are willing to use their crypto as money. In that way, the business adoption of crypto could be pushed not just by companies driving cryptocurrency projects — which is the current case, with projects striving to create “partnerships” with different businesses, but also from the layer of consumers.