| |
 |
|
| |
|
|
| |
Proof of Burn Disadvantages |
| |
Several disadvantages have been identified with this consensus mechanism, including:
A large initial investment. One of the major criticisms is that PoB requires a large initial investment to participate. Because you must burn coins, your only other option is to buy them in exchange. This means that you would likely need many thousands or millions of dollars just to get started.
Going against the decentralized nature of cryptocurrency. The key reason cryptocurrencies attract people is decentralization. In other words, there is no one central authority controlling it. Proof-of-Burn goes against this by controlling those who hold the most coins.
Risk of speculation. A potential issue with PoB is that it could be used for speculation. This means that people could buy up coins, wait until they have a large supply, and then use them to create blocks. This would give them control over the network and could lead to instability.
Risk of hoarding. Another potential issue is that people could use PoB to hoard coins. This would limit the available supply and could lead to an increase in value. While this is good for those who hold the coins, it is not good for the overall health of the currency.
Attacking other currencies. Proof-of-Burn could attack other currencies. This means that someone could buy up a large supply of a certain coin, use it to create blocks, and then dump the coins on the open market. This would lead to a devaluation of the currency and be very harmful. |
| |
|
 |
| |
|
| |
| |
|
 |
Planet Koinos have received approval from Koinos Group
to use the Koinos Logo, images and text. 2022
For more information contact webmaster@planetkoinos.com |
| |
|
|
|
