The P?OO? O? ???? invented by Iain Stewart has been repeatedly proposed as an alternative to the Proof Of Work.
It resembles the Proof of Work algorithm but with less energy consumption. The process of validating blocks within PoB-based networks does not require the use of computational resources or hardware for mining.
Cryptocurrencies are simply burned as a means of "investing" resources in the blockchain, so mining candidates don't have to invest physical resources. In PoB systems, miners invest in virtual mining rigs (it's as if burning coins creates virtual mining platforms).
Through coin burns, users can demonstrate their commitment to the network, obtaining the right to "undermine" and validate transactions. Since the process of eliminating coins represents a virtual mining power, the greater the number of coins burned by a user in favor of the system, the greater his mining power and, consequently, the higher the chances of being chosen as a validator of the next block.
The process of eliminating coins consists in sending them to publicly verifiable addresses but to which no private key is associated. They are called "eater addresses": they are generated randomly without associating a private key to them. Of course, the process of eliminating coins reduces availability on the market and creates an economic scarcity, causing a potential increase in their value.
In Proof of Burn instead of investing electricity, labor and computing power are burned coins.
As with PoW blockchains, PoB systems offer rewards for creating a block, and within a certain period of time they should cover the initial investment of the burnt coins.
Here we can see Eater Addresses with burnt Bitcoins: Bitcoin Eater Address (Blockchain.com) or Counterparty (Blockchain.com)
The more coins you burn, the higher the mining power will be, therefore the probability that the reward is greater. Among the most famous cryptocurrencies that use this mechanism to date we have: SlimCoin (SLM): 0,03$, Counterparty (XCP): 1$ & Factom (FCT): 1,70$.
