Definition
Proof of Space (PoSpace), sometimes called proof of capacity, is a consensus mechanism in which participants demonstrate they have reserved a quantity of disk storage rather than expending energy or staking coins. It is the basis of the Chia Network, created by BitTorrent author Bram Cohen, and is presented here for reference; Bitcoin itself uses proof-of-work.
Plotting and farming
Participants first run a one-time setup called plotting, generating large files full of pre-computed cryptographic hashes; these files are the reserved space. Afterward, farming is cheap: the network issues 256-bit challenges, and a farmer scans their stored plots for a qualifying proof, submitting any winner. Because the storage is committed in advance, ongoing power draw is minimal. Chia's documentation reports a minimum practical plot footprint around 101 GiB and estimates energy use a small fraction of Bitcoin's.
Proof of Space and Time
Storage alone is vulnerable to grinding, where an attacker rapidly regenerates plots to fish for favorable proofs. Chia counters this by combining PoSpace with Proof of Time: specialized nodes called timelords compute a verifiable delay function (VDF), a sequential, un-parallelizable computation that proves real wall-clock time elapsed between blocks. The combination is marketed as Proof of Space and Time (PoST).
Like other alternatives, PoSpace must still satisfy Byzantine Fault Tolerance, and it borrows a longest-chain style fork choice analogous to the Longest Chain Rule used in Bitcoin.
In Simple Terms
Proof of Space (PoSpace), sometimes called proof of capacity, is a consensus mechanism in which participants demonstrate they have reserved a quantity of disk storage…