What Is PeerCoin? 3 Facts You Should Know About This Cryptocurrency
Cryptocurrency is probably the top topic in finance. It’s lucrative, the assets are secure, and many experts believe that it may replace fiat currency in years to come.
Bitcoin, Dogecoin, and Ethereum are different types of cryptocurrencies. All cryptocurrency uses blockchain technology for every transaction.
Studies show that blockchain technology makes every transaction secure, but it also makes data traceable and instantly accessible.
In short, blockchain technology is everything your online banking experience should aspire to be.
As you can imagine, there is no simple way for blockchain to deliver these benefits.
Currencies on the blockchain all work using different principles. These are proof-of-work and proof-of-stake.
Bitcoin and Ethereum use the proof-of-work principle to add blocks to the blockchain. Users will solve computer-based mathematical problems and the user/users to solve them first receives a prize. The winner would receive the fees associated with transactions in the new block.
For context, imagine if you got a chance to compete for all the transaction fees associated with a new ATM in your neighborhood. Jackpot, right?
Contrarily, the proof-of-stake method doesn’t allow everyone to compete for cash. The principle selects a validator based on the number of tokens they’ve invested. The validator is now tasked with ensuring that all transactions done on the new block are within the rules of the blockchain.
After the system recognizes that all is well, the validator will be paid in transaction fees.
PeerCoin is said to deliver the best of both worlds. But before you jump on the PeerCoin bandwagon, this is what you should know:
- Proof-of-Stake was first implemented with PeerCoin
PeerCoin creators Sunny King and Scott Nadal were the first to implement this principle in 2012.
They wanted to create a blockchain that gave stakeholders co-ownership. Similar to how stakeholders have joint ownership in a publicly-traded company.
As such, this currency is a pioneer for the proof-of-stake method.
2. PeerCoin regulates minting with time
Studies show that Bitcoin and other proof-of-work currencies use electricity to regulate the creation of new blocks. PeerCoin is similar, but instead of electricity, it uses time.
Peercoin users are only allowed to mint new blocks after they have invested coins for at least 30 days. This way, it’s hard for someone to monopolize block creation.
3. PeerCoin makes it hard for users to start price wars
To drive the price of PeerCoin up or down, you’d need pretty deep pockets. Research shows that to own 51% of PeerCoin tokens, you’d need at least 80 billion dollars.
Launching an attack on PeerCoin would probably leave you bankrupt.
Outlined above are only the basics. PeerCoin continues to grow and evolve and capture the eyes of potential investors.
To stay up-to-date with everything PeerCoin-related, you’ll need to stay tuned to crypto news outlets and reports.
As it is with trading, the news can help you make wise investments if you know how to read it right!