Peercoin

Definition of 'Peercoin'


Peercoin is an alternative cryptocurrency launched in August 2012 and is based on the Bitcoin framework. Peercoin is also referred to as PPCoin, Peer-to-Peer Coin and P2P Coin. It is one of the leading cryptocurrencies in terms of market capitalization. Peercoin was created by software developers Sunny King (a pseudonym) and Scott Nadal, and is the first digital currency that uses a combination of proof-of-stake and proof-of-work. Most altcoins tend to address perceived shortcomings in Bitcoin; Peercoin targets the issue of Bitcoin's high-energy consumption and aims to provide increased security as well as energy efficiency. 

Investopedia explains 'Peercoin'


Peercoin is the first cryptocurrency to introduce a proof-of-stake and proof-of-work hybrid system. The coins are initially mined through the commonly-used proof-of-work hashing process but as the hashing difficulty increases over time, users are rewarded with coins by the proof-of-stake algorithm. Proof-of-stake block generation is based on the coins held by individuals; thus, someone holding 1% of the currency will be rewarded with 1% of all proof-of-stake coin blocks.

Block generation through proof-of-stake requires minimal energy as compared to generating hardware-intensive proof-of-work hashes. Thus as the proof-of-work blocks become less rewarding, there is a transition to using the proof-of-stake portion of the algorithm, which requires minimal energy for generating blocks. This means that over time, the network of Peercoin will consume less energy. In addition, the hybrid system of block generation also helps to increase security. The use of proof-of-stake system raises the cost of an attack, since acquiring 51% of all existing coins is more difficult than acquiring 51% of all mining power. 



comments powered by Disqus
Hot Definitions
  1. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an 80% loan-to-value ratio, the second position lien has a 10% loan-to-value ratio and the borrower makes a 10% down payment. 80-10-10 mortgage transactions are piggy-back mortgage transactions, and are frequently used by borrowers to avoid paying private mortgage insurance.
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific benchmark, such as a SPDR. Unlike actively managed ETFs, passive ETFs are not managed by a fund manager on a daily basis.
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
Trading Center