While most coins use proof of work or proof of stake in block generation, there is one coin, CHIA, which is currently using the Proof of Capacity (PoC) mechanism. Let's see all the details of this innovative mining mechanism together.
Rather than constantly changing the numbers in the block header and hashing for the solution, the Proof of Capacity mechanism involves hard drive tracking - that is, storing the solutions on the computer before the extraction even begins. Some solutions are faster than others. If your hard drive seems to have the fastest solution to the newest block puzzle, you've won the block. The mining algorithm is too complicated to calculate in real time, and the block times are so short, that the solutions have to be saved to the hard drive in advance. Ultimately, the more solutions, even known ones, are on your hard drive, the greater the chances of having the best solution for the newest puzzle.
SKILL TEST - TECHNICAL EXPLANATION
The skill test involves two parties. There is the hard drive part and the real block mining. Depending on the size of your hard drive, it can take days or even weeks to create unique print files. The texture uses a very slow hash known as Shabal. This is different from the SHA-256 hash used earlier in the article, which Bitcoin miners have been up to quickly. Since Shabal hashes are difficult to calculate, we precompose them and store them on a hard drive. This process is known as hard drive plotting.
ADVANTAGES
It is possible to use any normal hard drive so that other miners did not get an advantage from buying specialized equipment, for example with ASIC mining for Bitcoin. Using hard drives is 30 times more energy efficient than ASIC-based extraction. Proof of Capacity is more decentralized because everyone has a hard drive. You can even extract from your Android phone's hard drive. Miners don't have to continually upgrade equipment. Old hard drives can store data as well as new ones. After the extraction is complete, you can erase the hard drive and use it for its original purpose.
DISADVANTAGES
Proof of Capacity could lead to another "arms race". People use terabyte hard drives today, but eventually we might see petabytes, exabytes, and zettabytes. Proof of ability is a relatively new technology and not rigorously tested and challenged in the real world. Currently, hard drives track useless data beyond their mining purpose. However, there are plans to have hard drives as redundant storage for important open source information. Hard drives may store maps, Wikipedia articles, or other information that deserves to be preserved. There is already malware mining Bitcoin on people's computers. If Proof of Capacity becomes popular, you may see malware tracking people's hard drives. The main difference is that you are much less likely to notice that some of your disk space is taken up.
CONCLUSION
The Proof of Capacity is an interesting solution to the problems that have emerged with the classical consensus algorithms with the Proof of Work mechanism. It tends to lead to greater decentralization of mining power and lower energy consumption. Still not widespread enough, only time will tell how effective the proficiency test is and whether or not it will become the new norm for consensus algorithms.
