Green cryptocurrency for a sustainable future.
Introduction
Peercoin was launched in 2012, making it one of the first blockchains to be released. It introduced a number of new innovations which substantially improved on the design of other blockchain protocols that existed at the time, principally Bitcoin’s proof-of-work. Peercoin’s alternative to proof-of-work, proof-of-stake, remains unrivaled to this day as a blockchain consensus protocol and one which is achieving more mainstream adoption with each passing year.
For the newcomer, understanding why Peercoin’s blockchain technology is superior first requires some understanding about blockchains in general, as well as understanding Peercoin’s primary competitor, Bitcoin; therefore we will start by learning what blockchains are, and what they offer. Once we understand this, we’ll cover the main problems behind the world’s first blockchain, Bitcoin, and how Peercoin has fixed these flaws.
You will discover that Sunny King, Peercoin’s original creator, had incredible foresight into the future of proof-of-work networks, and how Peercoin has been designed as a drop-in replacement in preparation for their inevitable decline.
Efficient Security
Peercoin (PPC) first came online in 2012, making it one of the earliest pioneering blockchains. The key innovation of Peercoin is its invention of proof-of-stake, an alternative consensus protocol to Bitcoin’s proof-of-work.
Proof-of-work blockchains are secured by proving the consumption of a costly limited resource: electricity. Proof-of-stake replaces this expensive security protocol by utilizing an alternative scarce resource: time.
Due to the cost efficient nature of proof-of-stake’s time based consensus rules, Peercoin is capable of allowing any network connected computer to participate in the blockchain’s security process. This efficiency strengthens Peercoin by growing the number of security providers and ensuring that security can be sustained over the long-term.
User Governance
In Peercoin, coin owners (stakeholders) are the ones who wield influence over the network, produce new blocks, and secure the chain. Stakeholders of Peercoin co-own the blockchain and collectively decide its future through protocol voting.
Voting is carried out the same way Peercoin is secured, through a process called proof-of-stake minting. Stakeholders participate in minting simply by installing the version of Peercoin they support, loading their wallet with PPC, and holding them while they are occasionally selected by Peercoin’s protocol to mint the next block in the chain. Every minted block rewards stakeholders with new PPC and a vote.
This makes Peercoin the first blockchain capable of allowing its protocol rules to be governed directly by its users, making for a network that is more decentralized, democratic, and easily secured by people around the world.
Trustless Base Layer
Given that the blockchain is immutable by its very nature and all recorded data is stored forever, chain bloat becomes an escalating problem at higher usage levels which harms both security and the ability of the network to scale.
To preserve the trustless security of the blockchain and ensure its ability to scale to global usage levels, Peercoin’s inventors tailored the blockchain and its economics to fulfill the specific role of base layer settlement network.
This role focuses Peercoin development on modularity, keeping the protocol simple and secure with as few features as possible, while maintaining the blockchain as a stable base upon which any number of additional layers can be built on top.
Fair Distribution
Cryptocurrencies must have a distribution wide enough to ensure that the overall coin supply does not get concentrated into the hands of too few people.
However a problem exists for blockchains that are run purely on Proof-of-Stake, as there is no easy way to fairly distribute the initial coin supply. In a pure Proof-of-Stake blockchain network, the entire coin supply is usually created by the project founder, who then chooses which individuals get to own stake. This distribution method often ends in a network with a highly centralized coin supply.
To solve this problem, Peercoin uses Proof-of-Stake for network security and Proof-of-Work for distribution. Proof-of-Work miners are rewarded with new PPC generated by the network. This newly mined PPC is then sold on exchanges by miners for profit and purchased by new stakeholders who can use it to mint blocks by participating in Proof-of-Stake consensus.
So while Proof-of-Stake provides security directly, Proof-of-Work is designed to do so indirectly by strengthening the decentralization of the network through a wider distribution of PPC to new potential minters.
Reliable Value Store
Efficiency, sustainability, user governance, scalability through modularity, and a fair distribution. All these qualities combine to form a long-term minded blockchain network that is primarily focused on maximizing decentralization.
This primary focus works to preserve the trustless, immutable and censorship resistant nature of Peercoin so that it can always be relied upon to fulfill its core role as a distributed mechanism for securely storing all types of value.
This value can be anything from fiat wealth being stored in PPC, to data being stored on the chain in the form of tokens, records, or contracts. Regardless of the type of value that is being stored, Peercoin was built with the fundamentals in mind to always ensure that your data remains safe and secure.
Peercoin Primer
The Peercoin Primer is a short five part video series covering the basic fundamentals of Peercoin. Learn about important topics such as Peercoin's initial distribution, how proof of stake consensus works and the many benefits it offers, Peercoin's economic model and its use of limited inflation to produce sustainable security. Finally, we'll explain Peercoin's long-term mission as a trustless backbone cryptocurrency.