Proof of Capacity

Definition ∞ Proof of Capacity is a consensus mechanism where participants demonstrate their commitment to a blockchain by allocating hard drive space rather than computational power. Miners, or “plotters,” dedicate storage space to store potential solutions to a puzzle. The more storage space a participant commits, the higher their probability of finding the next block and earning rewards. This method aims to be more energy-efficient and accessible than proof-of-work systems.
Context ∞ News articles occasionally discuss Proof of Capacity as an alternative consensus mechanism, particularly in relation to energy efficiency and decentralization. Projects utilizing this approach seek to reduce the environmental impact associated with cryptocurrency mining. However, challenges related to storage optimization and potential centralization of hardware manufacturing persist. Its viability as a scalable and secure consensus method remains a subject of ongoing technical discussion and development.