Proof of Space

Proof of space, also called proof of storage, is a consensus mechanism in which participants prove they have set aside disk space instead of burning electricity as in proof of work. Users pre-fill drives with cryptographic data in a step known as plotting, and the network then issues periodic challenges; whoever holds the value closest to the challenge in their stored plots wins the right to create the next block. Chia is the best-known example. Ongoing energy use is far lower than ASIC mining, but the trade-offs are real: plotting is write-intensive and can wear out consumer SSDs, and large storage farms can concentrate block production much as mining pools do.