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Review on Peercoin by Mr Benji

Very, very old crypto

- The creators of Peercoin are Scott Nadal and the creator of Primecoin Sunny King hiding under the pseudonym.

- Peercoin is an internet peer-to-peer currency. It combines proof-of-work and proof-of-stake systems, which was used for the first time in this coin. The currency is inspired by Bitcoin, and although it has many common features, it differs from the protoplasts more than other cryptocurrencies. Peercoin according to the developers is to be a solution for the extraordinary energy consumption of the Bitcoin manufacturing process. Lower energy consumption is to be ensured thanks to the Proof-of-stake system. Ultimately, as much energy as needed to run the Peercoin client will be consumed.

- Although Peercoin does not have a clearly defined coin limit, it has a deflation element, because 0.01 PPC is irretrievably destroyed for every kilobyte of transaction. This is due to the specificity of the combined proof-of-stake and proof-of-work.

from the classic proof-of-work where users are rewarded for their work. At POS, coins are generated for their own possession. When creating a block based on the POS from the miner, it is required to create a transaction / coin rate, which consists in sending a certain part of the miner's funds to himself. As part of this process, the amount of the prize is also specified. This means that someone with 5% of coins will generate 5% of blocks in the POS system, while the generation in POS accounts for 1% of the total number of coins.

The risk of a 51% attack - is significantly reduced in Peercoin. A 51% attack can occur when someone controls at least 51% of the network's power. The control of at least half the power of the network gives the theoretical possibility of a double-spend or double issue of one Bitcoin amount. Thus, if the number of miners decreases, the share of the network power of each of the others increases. This leads to the risk of someone achieving 51% of the network power. The POS system reduces this risk because new coins are generated not only by miners, but also by the owners themselves. What's more, Peercoin aims to ensure that in the future most of the coins will be generated by POS, not by POW. Due to the growing difficulty, digging coins will be less and less profitable.

Inflation is expected to be at a stable level of 1% per year due to the use of the POS system. This means that the number of coins is theoretically unlimited, although there is a limit to 2 billion coins technically in the Peercoin code. This limit, however, can be easily changed, and it can take tens and hundreds of years to achieve it because of the specificity of supply.

The energy needed to operate the network is much smaller than in the case of Bitcoin, which requires efficient machines with high computing power due to the high difficulty of extraction. Although most coins will be mined by the POW in the initial stage of project development, the POS will ultimately be topped by the increasing difficulty of digging Peercoin and thus the decreasing profitability of extraction.

Due to the hybrid POW and POS system, it was accepted in the environment that coins can be both "excavated" and "knocked out". Coin stripping is particularly beneficial to ordinary users, as it does not require any hardware or technical knowledge. In addition, Peercoin has one of the smallest blockchains, which is undoubtedly an advantage (0.65GB).

Fee, that is, the transaction fee is fixed (0.01 PPC / kb) and additionally completely destroyed. This means that miners receive only a prize for blocks, and mempool does not exist. Therefore, you can not speed up transactions by setting a higher transaction fee. This may be a problem in the future as the value of Peercoin increases, because such a limitation can only be changed on the way of hardfork.

Pros & cons

  • The first of the creators withdrew from the project and only King remains active. The coin was created on August 12, 2012. is therefore one of the world's oldest cryptocurrencies.
  • Low volume people have forgotten