What is Proof-of-Capacity?

Deepkamal
3 min readJan 13, 2022

Introduction

In our previous blogs, you have already read about the Proof-of-Work and Proof-of-Stake consensus mechanisms used by different DeFi protocols. In this blog, we shall discuss the concept and working of another such model called the Proof-of-Capacity.

Definition

Proof-of-Capacity (also known as Proof-of-Storage or Proof-of-Space) is a consensus mechanism algorithm used in certain blockchains that allows the miners to use the storage capacity of their hard drives to validate transactions on the blockchain and decide mining rights.

Unlike Proof-of-Work (which uses the computing power of the mining computer) and Proof-of-Stake (which uses the stake of the miners in the particular protocol), Proof-of-Capacity depends on the free space available on the miners’ hard drives.

Burst and Storj are two of the blockchains that operate on a PoC consensus model.

How does Proof-of-Capacity work?

In the PoW consensus model, miners need to solve a cryptographic problem and generate countless numbers of possible results in real-time as the headers of a block are constantly changed. Whereas, in the PoC consensus model the solutions of the cryptographic problem are determined prior to the block validation phase and are stored in the hard drives of the miners for future use.

The PoC algorithm can be divided into two phases namely, plotting and mining.

In the plotting phase, all possible nonces are calculated through repetitive hashing of data and are stored in the hard drives of the miners. Nonce, which is short for “number only used once” is the first thing that a miner needs to determine before he can validate a block in the blockchain.

The high difficulty level to solve the Shabal hash used in PoC makes it extremely necessary for miners to pre-calculate and store the nonces. The number of nonces that can be stored is directly proportional to the availability of free space in the miners’ hard drives. Usually, one nonce contains 8192 hashes numbered from 0–8191. Then adjacent hashes are paired together to form “scoops” which are numbered from 0–4095.

In the mining phase, the miner determines a scoop number. He/She then uses this data along with the information of a nonce to calculate a deadline value. She/He then repeats this process with each nonce which is stored on his/her hard drives and determines the minimum value of the deadline.

The deadline is the amount of time in seconds that is needed to pass since the last block was forged before a miner can forge a new block. If no other miner forges any block within this deadline, our miner forges the block and earns her/his rewards.

Advantages of PoC

As this model depends upon the storage capacity of the miners’ hard drives and not the computing power of their computers, miners do not need sophisticated hardware setups to operate efficiently.

The energy consumption of miners using the PoC model is far less than those using the PoW consensus model thus making it very eco-friendly.

PoC is much more scalable as the availability of hard drives and their relatively lower costs make it easier for people to participate in the mining processes of such blockchains.

If required, the mining data can be erased and the hard drives can be used for any other purpose by the miners thus making it highly economical as well.

Disadvantages of PoC

The popularity of the PoC model is very less compared to its other counterparts like PoW and PoS and as a result, its mass usage scenario is yet to be analyzed.

The fact that this model uses the storage capacity of the miners gives huge corporations with massive storage capacity an unfair advantage over the ones who might be mining using limited storage capacity devices like their smartphones.

The use of malware to use the storage of other miners without their knowledge is also a huge risk in the PoC model as such cases are not unheard of in the case of mining in the PoW model.

Conclusion

With so many consensus algorithms being developed so fast, it will not be long before we can develop and deploy an ideal algorithm to be used in the long and promising future of blockchain technology.

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Deepkamal

Content writer specializing in blockchains and DeFi