Explain what Proof of Resource is and how it works Mining using Proof-of-Capacity and how this algorithm differs from Proof-of-Work and Proof-of-Stake.
Proof-of-Capacity (Proof of Resources, PoC) is a consensus algorithm used in blockchains that uses hard disk space for cryptocurrency mining, not computational power, as in the Proof-of-Work algorithm, or the number of available coins, as in the Proof-of-Stake algorithm.
Proof-of-Capacity has emerged as one of the possible solutions to the problem of high energy consumption when using the Proof-of-Work algorithm and the situation in which it is more profitable for miners to save cryptocurrency rather than spend it (in the case of PoS).
When using the PoW algorithm, miners with the maximum speed change the numerical parameter in the block header, trying to find the desired hash of the block. The first miner, who has found this hash value, or nonce, distributes information over the network. The remaining miners confirm the transaction and proceed to work on the next block. In essence, this is a type of lottery where miners constantly search through hash values to find the right one.
How does the Proof-of-Capacity
Proof-of-Capacity allows the nodes on the blockchain network to use free space on the hard disk for mining available cryptocurrencies. Instead of constantly iterating over the numeric parameters in the block header and re-hashing, PoC creates a list of possible solutions on the hard disk of the miner even before the start of mining as such.
The larger the amount of hard disk memory, the more possible solutions can be stored on it, which increases the miner's chances of finding the desired hash value on his list and getting a reward for the block.
Continuing the lottery analogy: if you need to guess as many numbers as possible to get a win, then the longer your list of possible answers, the higher your chances of success. In addition, you can save your lottery tickets and use them again and again.
Proof-of-Capacity consists of two stages: plating (hard disk preparation) and mining.
Plotting
First, the hard disk is pinged, that is, by re-hashing the data, including the miner's account ID, a list is created with all possible non-values. Each nones contains 8192 hashes that are numbered from 0 to 8192. Neighboring hashes form pairs, called scoops. So 0 and 1 hashes make 0 stingy, 2 and 3 hashes make 1 sting, and so on.
Mining
The second stage is the actual mining, or mining of cryptocurrency, when the miner calculates the number of miserly. For example, a miner starts mining, and calculations give him a mean number of 38. Then the miner takes the first non-38 mean and uses the data of this mean to calculate the deadline value. The process is repeated until the deadlines of all the nons stored on the hard disk are known. After calculating all the deadlines, the miner chooses the minimum one.
Deadline is the number of seconds that must pass after the creation of the previous block before the miner can proceed to the new block. If no one has created a new block during this time, the miner can do it and get a reward.
For example, if miner X has a minimum deadline equal to 36 seconds, and no one has created a new block for these 36 seconds, miner X will have the opportunity to create the next block and get a reward.
Advantages and disadvantages of Proof-of-Capacity
The advantage of PoC is that it can use any hard drives, including those with Android OS, and it is believed that it is 30 times more efficient than ASIC miners used for mining bitcoins.
It does not need special equipment and constant improvement of hard drives. Mining data can be easily deleted and used \ disk to store any other information.
The disadvantages of this algorithm include its insufficient popularity. In addition, there may be malicious programs that will use for mining a place on the hard drives of people without their knowledge.