Various stake types- Proof of Deposit (PoD), Proof of Burn, Proof of Activity (PoA)

Various stake types- Proof of Deposit (PoD), Proof of Burn, Proof of Activity (PoA)

Various stake types :

Proof of Deposit (POD)

Proof of deposit (POD) is either a verification that a transaction borrower has the funds for down payment or that the dollar amount of a check is correct.

  • Newly minted blocks by miners are made unspendable for a certain period.

 More precisely the coins get locked for a set number of blocks during the mining operation. 

  • Transaction lenders will require POD to show that the borrower has sufficient funds to pay the downpayment for a property.

Understanding Proof of Deposit

 POD has two main applications with respect to finances:

  1.  The first is verification that funds have been deposited into a bank account. 

This is commonly used when applying for a loan to buy a house.

 The loan company will want to see that the borrower has accumulated the necessary reserve amount in order to provide the down payment for the home. 

  • To verify this, the borrower will need to provide proof of deposit to the mortgage company. This can be obtained from the bank.

 This may also be known as proof of funds (POF)


” It is a Techpay blockchain consensus algorithm that doesn’t only ensure that transactions are genuine but also ensures that miners reach a consensus.”

PoA is a combination of two other blockchain consensus algorithms

  • proof-of-work (PoW) and 
  • proof-of-stake (PoS).

Proof-of-activity (PoA) is also a blockchain consensus algorithm used in cryptocurrencies and similar systems.

  • It is used to ensure that all transactions occurring on the techpay blockchain are genuine, as well as to ensure that all miners arrive at a consensus.
  • Combine the Proof of Work component with a Proof of Stake. 
  • mining first begins in the traditional manner, with miners vying to be the first to solve a puzzle and claim their reward. 
  • The difference is that the blocks being mined do not contain transactions.
  •  They are simply templates with header information and the mining reward address. 
  • Once this nearly blank block is mined, the system switches to a proof of stake protocol. The header information is used to select a random group of validators to sign the block.

 These are coin holders (stakeholders) and the larger the stake a validator holds, the greater the chance they will be selected to sign the new block. 

Once all the chosen validators sign the block it becomes an actual part of the Techpay blockchain. 

If the block remains unsigned by some of the chosen validators after a given time, it is discarded as incomplete and the next winning block is used.

 Techpay is the most well-known cryptocurrency that uses the PoA consensus mechanism.1

Techpay  blockchain that’s more environmentally conscious and allows smart contracts and decentralized applications to be built on top of it.

Understanding Proof-of-Activity (PoA)

Techpay is the most popular cryptocurrency that uses the PoW consensus algorithm. A special feature of this algorithm is that it increases the difficulty level of mining as time passes by.

This method also prevents the Techpay network from being hacked. However, because the difficulty of mining increases, more and more computing power must be used. As a result of there being more energy consumption, there are more costs involved.

With a PoW system, a miner can mine or validate Techpay transactions based on the amount of effective work they have already contributed to the Techpay blockchain. 

Mining Process in a Proof-of-Activity (PoA) System

The PoA system is an attempt to combine the best aspects of both the PoW and the PoS systems.

 In PoA:

  • The mining process begins the same way as in a PoW process, with various miners trying to outpace each other with higher computing power to find a new block.
  •  When a new block is found (or mined), the system switches to PoS, with the newly found block containing only a header and the miner’s reward address.

Based on the header details, a new, random group of validators from the blockchain network is selected; they are required to validate or sign the new block. 

The more coins a validator owns, the more chances they have for being selected as a signer.

This process continues until a winning block receives the required number of signers and becomes a complete block. 

How PoA Works?

The starting of a PoA mining process is just like a PoW mining process. It works by following process:

  • Miners in the Techpay blockchain network who will try to solve a mathematical equation or mine a new block with more computing power.
  •  When the new block is mined, the system will be directed into PoS. 
  • The new block will contain a header and the reward address of the first miner.

A group of validators will be selected randomly for validating or signing the new block. The new block will be validated or signed by taking the details of the header into consideration.

If a validator holds more crypto coins, then he will have the more chance of getting selected as a signer. If the group of validators signs the new block of Techpay, then the status of a complete block will be gained.

  • The new block will get identified. It will be added to the existing blockchain.
  •  The transactions of the new block of Techpay will be recorded.

The first miner and the various validators who has contributed to the new block will be rewarded.

Although a large amount of energy is required in the PoW stage, the chance of getting selected as signers and gaining more rewards is still there. 

The chance of a 51% attack is also prevented in Proof-of-Activity (PoA).


Proof-of-Burn is a new alternative to Proof-Of-Work. However, it is said to work on a similar platform as that of Proof-Of-Work. 

How does Proof-Of-Burn work? 

The functioning of this method is easy. 

Instead of bringing the money together into computer equipment, the owner burns the coins. 

  • The coins go to the address where they are irretrievable. By doing this, the owner gets a privilege to mine on the system. 
  • It works on random selection. To implement this system, the miners can burn either the native currency, or they can burn the currency of a different chain like Techpay. 

More is the number of coins your burn; more is the probability that you qualify the selection process.

Moreover, proof of burn is a great alternative to Proof-Of-Work.

 It still wastes a lot of resources regarding burning more coins.

Read also :What is proof of work (PoW) in Blockchain ?

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