Proof of burn

Okay kiddo, imagine you have a toy car which you no longer use and want to get rid of it. Instead of just throwing it away, you decide to burn it. Now, burning something means turning it into ashes or smoke. Similarly, Proof of Burn is a process where people use their unique tokens or cryptocurrencies and burn (destroy) them by sending them to an address that no one can access.

Why would they do that? Well, proof of burn is a way to create a new cryptocurrency without using any mining equipment or energy. It's like sacrificing your own tokens or coins to create a new one. For example, let's say you have 100 ABC coins, but you want to create a new XYZ coin. You can send your 100 ABC coins to a special address, and these ABC coins would be burned, which means they don't exist anymore. In return, you would receive a certain amount of XYZ coins because you proved that you destroyed your ABC coins.

This process makes it difficult for people to cheat or hack the system because they would have to burn their own tokens or coins to create new ones. It also makes the new cryptocurrency valuable because people had to give up something to create it.

So, in simpler terms, proof of burn is like burning your old toys to create new ones. It's a way to start something new by giving up something old.