Instead, this method makes use of a set of hard disk drives. HDD miners do not require graphics processing units like in GPU mining, or ASIC miners to produce new blocks in the distributed ledger. Hard drive mining is a way of generating cryptocurrency by using hard disk drives. Of course, there are many other mining protocols, but we have only showcased the most popular ones and the one that is relevant to our guide. Unlike PoC blockchains, PoS blockchains give out cryptocurrency mining rewards by using the monthly payments received from space renting services. In this storage system, users rent their HDD space to other users, and disk space owners are able to mine cryptocurrency using the blockchain’s resources. Proof-of-Storage, also known as proof-of-space or PoS, uses free disk space like PoC, but this protocol uses the free memory space to create decentralized cloud storage instead of generating new blocks. The mining involves miners competing to find the solution, and whoever manages to find it first gets to mine the next block.Īs a means of this proof, miners share their free disk space in order to create new mining blocks and receive a mining reward. Plotting is when you generate a random solution, or a plot, via the Shabal cryptographic algorithm, that is then stored on the miner’s hard drive. This mining system consists of two parts: plotting and mining. This is why this consensus model is used for hard drive mining. Proof of Capacity is a consensus algorithm which instead of using ASICs computation to verify transactions, makes use of hard drives and storage. Staking rewards are new coins generated by minimum computing power. Proof of Stake does not require physical hardware instead, producing new coins through staking, a process in which network users hold their coins and leave their computer on. Such type of mining requires setting up physical hardware rigs made out of ASIC miners or graphic cards, depending on the mining difficulty of the network. Proof of Work is a mining protocol, which is also used by cryptos, such as Bitcoin, that requires a lot of mining power in order to compute the algorithms. There are various types of protocols, some requiring physical mining equipment, while you just need to hold the coins in an active wallet.
A blockchain protocol, also known as a consensus method, is a system that manages how consensus is reached and validates transactions within a blockchain network.
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