Listen to the exclusive interview with Burst Developer Daniel Jones on the 18 October 2018 edition of the BitcoinNews.com Daily Podcast
BitcoinNews.com did an exclusive interview with Daniel Jones, one of the Burst developers. Burst began in 2014 as a fork of NXT, which is itself a fork of Bitcoin. NXT uses Proof of Stake, but the original Burst developers modified the code and implemented a unique new protocol called Proof of Capacity. Jones says “Proof of Capacity is a consensus algorithm based on the idea of how large of a plot, or size, or space that you have to contribute to the network”. Mining with Proof of Capacity requires negligible electricity, making it one of the very few cryptos that can be profitably mined on personal computers.
Burst has a market cap of USD 16.5 million, placing it at #248 out of 2,105 listed cryptocurrencies on CoinMarketCap as of 19 October 2018. Long-term, Burst has been rising in price relative to Bitcoin, and generally when altcoins rally Burst rallies more than most other altcoins. Jones attributes this to the real people and real development behind the Burst network. Jones compares Burst to the early days of Bitcoin, saying “Burst is like the early days of Bitcoin, having been involved since 2009 I saw this happen once before, and I’m seeing it happening again, and this is exciting to me. For me, Burst represents a better way of being able to mine, and being able to participate in a globally distributed network. The bar is so low anyone can get involved, allowing anyone to participate which makes the network stronger”.
Proof of Capacity is based on how much hard drive space each user has, making Burst mining highly decentralized since hard drive space is relatively cheap and easy to acquire versus Bitcoin mining rigs. With Proof of Capacity, a 1-time hashing cycle is done in a process called plotting, which proves the capacity of the hard drive being used for Burst mining. Burst uses Shabal-256, unlike Bitcoin which uses SHA-256 which is not effective for writing to a disk. Shabal-256 writes to the actual nonce, the writeable piece of a disk, on a hard drive. Each plot is unique and depends on system specifications, hard drive space, and the time of writing, which prevents collisions of block answers during Burst mining.
During Burst mining, the plot that is filled with billions of hashes is read to find the answer for a block. The only computationally intensive part of Burst mining is plotting when the hashes are written to the disk. During mining, the plot is read for answers every 4 minutes, which is the average block time for Burst. The answer is compared to everyone else’s answer. The time it takes to read the answer is called the deadline, and whoever has the shortest deadline gets the block reward. Jones says “When you have shorter deadlines you win because you win the actual target”. More hard drive space equals more block answers, making it easier to get a block reward.
Burst mining itself is not computationally intensive and requires negligible energy. This means Burst mining has practically zero electricity costs, just hard drive purchasing costs, making it one of the only cryptocurrencies that can be mined profitably on personal computers or even phones. Jones says “Burst is similar to Bitcoin in the early days, you can mine on it almost anything. People are mining on Android phones, people are able to run it on anything. I’ve seen people running it on a thermostat… I can tell somebody to start mining Bitcoin, but they need USD 1,100, or they could buy an external hard drive and start plotting and start mining Burst. It is a lot easier”. Further, plot files can be deleted and the hard drive can be used for something else if someone decides to stop mining Burst, unlike Bitcoin mining rigs which can only be used for Bitcoin mining.
When a Burst block is found, it is added to the blockchain, much like Bitcoin. The Burst block reward started at 10,000 and decays at 5% per month, and at the time of the interview, the Burst block reward was 769. The maximum supply of Burst is 2.158 billion, and 1.992 billion Burst have already been mined. The limited supply of Burst for mining means Burst inflation is small, which could help increase the price of Burst in the future.
Despite decreasing Burst block rewards, its network capacity is 250,000 TB, after being near 350,000 TB earlier in 2018 when Burst’s price was higher during the 2017-2018 crypto rally. At this time 1 TB of capacity generates 1-2 Burst a day, which is USD 0.01-0.02. For 1 PB of capacity, a miner can produce USD 10 per day. According to Jones 8 TB costs USD 125, so it would cost more than USD 15,000 to buy a PB. Due to hardware costs, it would take a long time to break even, but the upside is there are no electricity costs. The price of Burst will need to go up in the future, and current miners will have to HODL, to make its mining profitable. However, people who have spare hard drive space that they are not using anyways can make pure profit by mining Burst.
Burst has real on-chain storage via Cloudburst, which distributes a file across several transactions, or several blocks if necessary. This stores an immutable record of any file up to 1 MB for a one time cost. The cost of Cloudburst is to pay for transaction fees, since the file data is stored in the transaction data. Jones says “Knowing the transaction ID, and having a node or copy of the blockchain, I can literally extract it from there”. As long as the Burst network and blockchain exists the file is stored immutably, and it is quite likely Burst will be running for the foreseeable future since its community is growing according to Jones.
Additionally, Burst has integrated smart contract technology which can be used to create dApps and launch new crypto assets. There is an exchange built into the Burst wallet where Burst assets can be traded. It only costs 1,000 Burst, about USD 10, to create an asset. Tethered assets are coming out soon on Burst, which will be crypto assets tethered to values of real world things. Additionally, Burst has a Tangle-based Lightning Network built on top of the blockchain which makes it infinitely scalable.
Regarding Burst development, Jones says “This is a labor of love, we are not getting paid. For us, it’s about delivering a usable piece of software because we use it”.
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Image Courtesy: Burst