Proof of Capacity

Proof of capacity, sometimes written as proof of storage capacity, is a consensus mechanism in which miners commit hard-drive space instead of continuous computation. Before mining begins they generate and save large files of pre-computed hashes, a process called plotting; when a new block is due, each miner scans its plots for the value closest to the network's challenge, and the best match earns the right to produce the block. Burstcoin popularised the approach and it is closely related to proof of space. Electricity use during normal operation is far below proof of work, but plotting is disk-intensive, and pooled storage farms can centralise block production in much the same way mining pools do.