The blockchain of Sia is secured by a Proof of Work (PoW) algorithm. In blockchains, transactions are immutable and irreversible because every block is stamped with the solution of a cryptographical problem (in simple words, a very complex mathematical problem). PoW secures the blockchain because to revert a transaction, a malicious attacker would need more “work” capacity (computational power) than the rest of the network combined.
Alternative securing mechanisms have emerged in the last years, including Proof of Stake (PoS), Proof of Capacity (PoC) or Proof of Burn (PoB). In PoS, for instance, the chances for solving a block depend on the amount of coins hold by every wallet (the “stake”). Thus, in PoS big coin holders have more chances to obtain the mined block reward. PoS has become especially popular recently, and several users ask why PoW was chosen instead of PoW for securing the Sia’s blockchain.
Sia developers have stated their preference for PoW due to a number of reasons:
In Sia, hosts demonstrate that they are storing the files uploaded by the renters with a mechanism called Proof of Storage (PoS). Hosts submit to the blockchain small fragments of the renter’s file during the file contract span, and the blockchain autonomously decides by the end of the contract if the uptime requirement has been fulfilled.
As Proof of Storage and Proof of Stake share the same acronym (PoS), it is a common mistake among new users to confuse them.
In an upcoming update, Proof of Burn (PoB) mechanics will be introduced for hosts in Sia. “Burning” coins consist on sending them to an address that can’t be used, thus effectively retiring those coins from circulation. Hosts will have to burn a certain amount of Siacoins in order to prove they are legit, thus making very improbable a Sybil Attack.
Some cypto-assets use Proof of Burn as a mechanism for securing the blockchain instead of PoW or PoS. Some users may potentially confuse these two concepts, but it has to remain clear that in Sia PoW is the mechanism for securing the blockchain (and thus mining new coins) while PoB is just a mechanism to prove hosts legitimacy.