Similar to the Proof of Work, but instead of computing resources, Proof of Capacity leverages available disk space (storage). This is less vulnerable to specialised hardware allowing mining groups to centralise the network.
So how does Proof of Capacity work?
- Proof of Capacity uses a very slow hash known as Shabal, since hashes are hard to calculate, they are supposed to be precomputed and stored in a hard drive. This process is known as plotting your hard drive.
- When plotting, nodes create something called nonces. Nonces are created through repeated hashing of data. The more hard drive space a node allocates to plotting, the more nonces it can store.
- During mining, the node calculates a scoop number which gives a scoop data to calculate the amount of time, called a deadline. This process is repeated for all the nonces on the nodes hard drive. The deadline represents “the number of seconds that must elapse since the last block was forged before you are allowed to forge a block. The lowest deadline submitted to the network forges the block.
- The node that forges the block claims the block reward.
PoC is used by
PoC was first publicly implemented into a cryptocurrency with BurstCoin, founded in August 2014. Burst claims to favour smaller miners by design, making transaction costs cheaper and the network more decentralised.
Chia is an upcoming cryptocurrency developed by the creator of BitTorrent. It’s based on both proofs of capacity and time. Chia was released in the last quarter of 2018
Storj is a Amazon S3-like cloud platform that uses a blockchain to store data. It uses proof-of-capacity to both mine and store data.
SAFE is a decentralised web platform based on the PoC blockchain. It uses a variant of proof-of-capacity known as proof-of-resource to verify the farmer is holding the data and supplying when needed.