PoB (Proof of Burn)

Proof of Burn (PoB) is a consensus mechanism and token-distribution method that ties mining rights, or ownership of a new coin, to the permanent destruction of existing cryptocurrency rather than to computing power or locked-up stake.

Participants send coins to a verifiably unspendable "eater" address, one generated without a matching private key, so anyone can confirm the funds are gone forever but no one can ever spend them. The more a participant burns, the greater their odds of being chosen to produce the next block, or the larger their allocation of the new token, much like buying virtual mining rigs that lose value over time and must be topped up to stay competitive.

Because it needs no specialized hardware and uses little energy, PoB is often framed as a greener alternative to Proof of Work while still requiring "skin in the game," the same principle behind Proof of Stake, except the commitment is irreversible rather than merely locked up. Counterparty, built on top of the Bitcoin blockchain in 2014, is the best-known example: users burned over 2,100 BTC to receive its XCP token in a one-time, fully transparent distribution. Slimcoin combined PoB with Proof of Work and Proof of Stake in a hybrid model.

Outside pure consensus use, "burning" also covers cases where a project relaunches under a new team and asks holders to destroy old tokens for a successor coin, or where a protocol burns tokens to shrink circulating supply. Uptake of dedicated PoB blockchains has stayed limited, and abandoned burn-based projects sometimes end up classified as dead coins.