Peercoin (PPC) is a peer to peer cryptocurrency which makes use of proof of stake and proof of work systems. What makes Peercoin different from other competitors is it was the first cryptocurrency to implement the hybrid system because due to proof of work systems for example found in Bitcoin require a huge amount of energy to maintain. Peercoin was founded in 2012 which makes it one of the oldest and established cryptocurrencies on the market, however, hasn’t made much of a mark compared to other cryptocurrencies. The white paper can be viewed at https://peercoin.net/whitepaper (PDF Download)
Proof of Stake & Proof of Work
Peercoin uses a hybrid system that was designed to address vulnerabilities that could occur in a pure proof-of-work system. Other cryptocurrencies such as bitcoin there is a risk of attacks resulting from a monopoly on mining share. This is because rewards from mining are declining exponentially which is a key issue stopping people from mining. As miners decline, the likelihood of a monopoly increases, which leaves the network vulnerable to a 51% attack (a 51% attack is when a single entity possesses over half the mining share, which would allow this entity to theoretically double-spend a transaction involving their coins). With a proof-of-stake system, new coins are generated based on the holdings of individuals. In other words, someone holding 1% of the currency will generate 1% of all proof-of-stake coin blocks. This has the effect of making a monopoly more costly and separates the risk of a monopoly from proof-of-work mining shares.
Energy Efficient
Peercoins Proof of Stake system was developed to address the high energy consumption problem that bitcoin faces. An example of Bitcoins high energy consumption shows that in December 2017, Bitcoin uses the same amount of energy it would take to provide power to 2.8 million households in the United States in one day. The proof-of-stake method of generating coins requires very minimal energy consumption, it only requires the energy to run the client software on a computer. As Proof of Stake becomes the primary source of coin generation, energy consumption decreases over time. As of January 2018, roughly 90% of new coins being generated are still from proof-of-work and the energy consumption of Peercoin uses roughly twenty percent of the energy consumption that Bitcoin would use.
Conclusion
Overall Peercoin (PPC) takes advantage of a hybrid system that solves the problems the proof of work systems cause such as decreasing attacks. Peercoin really shows it is aiming to make mining a better place however, with not many improvements since it was released it hasn’t shown much potential, if they want to succeed they will need to make the project stand out from the rest in more areas than one as Peercoin tends to only focus on mining rather than other key areas.
