Crypto Alphabet

What is Proof of Capacity (PoC)?

When it comes to generating specific cryptocurrencies, there are some specific requirements to take into account. Proof of Work coins require powerful computer hardware to do so. Proof of Stake, on the other hand, requires users to leave a wallet open and connected to the internet at all times. People who have a less powerful computer – or don’t want to let it running 24/7- may want to look into Proof of Capacity (PoC).

This particular “mining” algorithm requires users to share their available hard drive space. More specifically, Proof of Capacity requires users to allocate large amounts of hard drive space to start generating new coins. In most cases, this hard drive space is used as “plots” to store large amounts of data.

Allocating more available hard drive space will allow users to have more “plots” of data. If the hash of a plot, combined with the last block header, is less than a particular value, the user will find a block of coins on the network.  This principle is identical to Proof of Work mining, despite there not being powerful computer hardware involved by any means. Data storage is valuable to a lot of people and free hard drive space can be used to generate a small passive income through Proof of Capacity.

Proof of Capacity is very energy-efficient in this regard since it does not strain available computer resources. People who have limited hard disk space available to them may want to look for some other solutions, though, as it is not easy to generate a good amount of money with Proof of Capacity. Users who can share more hard drive space compared to others will have a better chance of “mining a block” with PoC.

What is rather remarkable is how PoC is ASIC resistant. Then again, it is not necessarily a fair system either. Anyone can invest in additional hard drives to earn more money compared to other users. It is impossible to create a completely fair system, even with Proof of Capacity. However, for those people who have terabytes of unused hard drive space, the protocol and coins supporting it are well worth checking out.