Most of the times we demonstrate the superiority of Proof-of-Capacity (PoC) compared with Proof-of-Work (PoW), because the latter is the most common consensus algorithm and shares a good number of similarities with PoC.

There is another protocol commonly seen as a good alternative to PoW: Proof-of-Stake (PoS). With PoS, the creator of a new block is chosen in a deterministic way, depending on its wealth, also defined as stake. It is often praised for solving the energy consumption problem of PoW as it removes the need to use energy consuming hardware. However, it also brings new problems to the table. The goal of this article is to demonstrate how PoC shares all the upsides of PoW and PoS, without their downsides.


The biggest drawback to PoS is the decentralization issue. Decentralization is the biggest driving force of cryptocurrencies and their main revolutionary aspect. Two problems are raised by a PoS system: initial distribution and mining reward.

In a PoS system, initial distribution of the coins is made through ICOs, crowdsales, airdrops or similar processes. As a result, distribution happens in a short period of time. At the very beginning, the coins are already concentrated in the hands of a minority. Moreover, with PoS people who have more coins get more coins. With this self-reinforcing process this monetary distribution system fosters inequality.

In a PoC system, coins are distributed to miners over a long period of time through mining. Everybody can mine as it only requires a computer and free HDD space, compared to specialized hardware necessary to mine PoW cryptocurrencies. Barriers to entry are very low. In a PoC system, miners are rewarded fairly in proportion to the disk capacity they use.

Energy consumption

This is the main argument behind PoS: it is often praised for its very low energy consumption compared to Proof-of-Work. However, Proof-of-Capacity shares that advantage of energy efficiency with PoS. In reality, with PoS you still have to run a computer which includes a hard drive. Mining with PoC consumes slightly more energy because in miners often have multiple HDDs that have to be plotted. The difference is very thin, and the tradeoff is that PoC is better decentralized and arguably more secure.

Risks of 51% attacks

51% attack refers to an attack on a blockchain by a group of miners controlling more than 50% of the network’s mining hashrate, or computing power. It would allow them to manipulate transactions to their liking.

In a Proof-of-Stake system, if a user gets 51% of the total currency supply there is no way – except some kind of divine developer intervention – to take it away from him. The money supply is your limited world. Once you gained a significant/majority stake, there is nothing else which can revent that.

On the other hand, if someone drove a 51% attack on Bitcoin or Burst, there is always the remedy to add more hardware to it, which is potentially an infinite source, to counterbalance the attacker.

If you want a more in-depth explanation, read this article.





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  1. I would disagree, even if i mine Burst.

    First, most of PoS haves the stake weigth in account. If someone could hoard 51% of the total coin supply, they will earn a stake and then must go for a minimun of stake time to gain another stake. This way, another staker could chime in and stake in.

    Second, there is always the rich-get-richer effect, when in PoS, the people with more coins get even more coins, but coins with fixed rated interest will still earn the same ammount, no matter what. Unfortunately, this does not happens to PoC. Everytime it takes longer for me to find new blocks and to get payouts from my pool due to the enormous amount of TB put into the network. Besides, someone with 51% of a coin, surely doesnt want it to fail. It will only hurt himself.

    What PoC does better than PoS is to solve the nothing-at-stake problem. As a PoC miner i must always mine in the main chain of the consensus because its the one thats going to pay me. While in PoS, i can stake in all the temporal fork that happens because i dont have nothing to lose, whatever chain becomes the consensus.

    As I said, i mine Burst, im happy at it, but I cant really agree with you that PoC is better than PoS. I would agree that its a lot better in all regard than PoW.

    1. “Besides, someone with 51% of a coin, surely doesnt want it to fail. It will only hurt himself.”

      Let’s start with this. It’s a fallacy assuming someone, who owns 51% of a coin has the highest interest to preserve this asset of his. If the coin is in the way (e.g. as a competitor) to other assets of said entity, it is by no means a given that this entity “surely” doesn’t want it to fail. Quite the contrary.

      Examples of this are well known. “Acquire and destroy” – or at least inhibit. So the 51% problem merely boils down to being an attack vector. Something that cannot be countered in PoS systems with a capped supply (PoS systems with an uncapped supply could evade it).

      There are no countermeasures against a 51% ownership situation, as the same entity could – under various aliases, pretend to own 10%, 15%, 20%, 6% -> and still have their 51%
      It’s safe to assume this being the regular case.

      Bottom line: PoS with uncapped supply can work – similar to our FIAT system – because they are basically an emulation of this system. PoS with capped supply are doomed as their design inherently allows the forming of “fiscal singularities”.

      What is entirely left out is the distribution process of PoS currencies. Because you need some to mine some … you evidently had to have some to start with. They must have been created out of thin air and the must have been – somehow – distributed. This whole initiation process is arbitrary and unfair – at least compared to mineable coins.

  2. “In a Proof-of-Space system, if a user gets 51% of the total currency supply there is no way – except some kind of divine developer intervention – to take it away from him”
    I think you mean Proof-of-Stake

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