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Proof of Space (PoSpace)

Proof of Space (PoSpace), also known as Proof of Capacity, is a consensus algorithm used in blockchain networks where participants prove they have allocated a certain amount of storage space to the network. Instead of competing over computational power as in Proof of Work (PoW), participants compete based on the amount of disk space they have committed.

Key Points:

  1. Disk Space Commitment: Participants, often referred to as “farmers,” allocate a portion of their storage space to store certain data or “plots” to participate in the consensus process.
  2. Energy Efficiency: PoSpace is considered more environmentally friendly than PoW because it requires significantly less energy. Once the initial plotting is done, very little additional power is needed.
  3. Initial Setup: While ongoing energy consumption is low, the initial process of plotting (preparing the storage space) can be time-consuming and resource-intensive.

How It Works:

  • Plotting: Participants start by generating and storing cryptographic numbers on their disk space in a process called “plotting.”
  • Block Validation: When a new block is to be added to the blockchain, the network software challenges participants to provide a specific number from their plots. The participant with the quickest valid answer gets to create the next block.
  • Rewards: The participant who successfully creates a block is rewarded, similar to mining rewards in PoW systems.

Benefits:

  • Energy Conservation: PoSpace consumes significantly less energy compared to PoW, making it a more sustainable option.
  • Accessibility: Since many people have unused disk space, PoSpace can be more accessible than PoW, which requires specialized hardware.

Challenges:

  • Wear and Tear: Constant reading and writing to a hard drive during the plotting process can reduce the lifespan of the storage device.
  • Centralization Risks: Large-scale storage providers could dominate the network, leading to centralization concerns.

Examples in Cryptocurrency:

  • Chia (XCH): Developed by Bram Cohen, the creator of BitTorrent, Chia uses a PoSpace mechanism. It gained attention as an eco-friendly alternative to traditional PoW cryptocurrencies.
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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin67,648 0.26 % 2.57 % 3.03 %
Litecoin85.84 0.12 % 0.47 % 4.60 %
XRP0.5300 0.10 % 0.44 % 2.58 %
Ethereum2,197.2 0.23 % 0.67 % 2.46 %
Dogecoin0.1548 0.37 % 0.09 % 7.69 %
Solana168.90 1.64 % 4.98 % 4.12 %
USDC1.000 0.10 % 0.02 % 0.08 %
Cardano0.2543 0.15 % 1.68 % 3.38 %
Tether0.9990 0.10 % 0.04 % 0.02 %
Binance Coin (Wormhole)222.47 0.38 % 4.71 % 3.08 %