Peercoin

AAA

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. 

RELATED TERMS
  1. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network ...
  2. Peer-To-Peer (Virtual Currency)

    The exchange or sharing of information, data, or assets between ...
  3. Paper Wallet

    A paper wallet is an offline mechanism for storing Bitcoins. ...
  4. Litecoin

    Launched in the year 2011, Litecoin is an alternative cryptocurrency ...
  5. Altcoin

    Altcoins are alternative cryptocurrencies launched after the ...
  6. Dogecoin

    Dogecoin is a peer-to-peer open source cryptocurrency and falls ...
Related Articles
  1. Investing Basics

    The Easy Way To Measure Bitcoin's Fair Market Value: A Do-It-Yourself Guide

    How do you determine the fair market value of a currency that has appreciated faster than the shares of even the hottest technology stocks?
  2. Investing News

    Will Bitcoin And Walmart Force Western Union To Change Its Business Model?

    Western Union is recognized across the globe for providing a fast, efficient way to move money. Just walk into a Western Union office and you can transfer money to friends, relatives or business ...
  3. Trading Strategies

    Winklevoss Interview: Bitcoin Payment System Worth $400 Billion

    The bull case for Bitcoin is often expressed as an estimate of the future value of all Bitcoins in circulation once it reaches its potential. The most widely known estimate of its intrinsic value ...
  4. Investing Basics

    Why Is Bitcoin's Value So Volatile?

    Bitcoin's value fluctuates due to a confluence of factors, including media hype and perceived value.
  5. Investing Basics

    Could One Bitcoin Come To Be Worth $1 Million? Q&A

    "If Bitcoin lives up to its potential and becomes the working capital of international trade, it could be used for cross border transactions."
  6. Active Trading

    What Is Bitcoin

    Bitcoin is the first decentralized digital currency. It is also sometimes referred to as a virtual currency or a crypto-currency.
  7. Investing Basics

    What is Bitcoin Mining?

    How does Bitcoin get released into circulation?
  8. Investing

    Why The Winklevoss Twins' New Bitcoin ETF Matters

    The Winklevoss Bitcoin Trust, currently moving towards regulatory approval and expected out later this year, will be a Bitcoin ETF. Currently, such an investment vehicle is only available to ...
  9. Economics

    Who Is Satoshi Nakamoto, Mysterious Bitcoin Founder?

    Short answer: No one knows.
  10. Investing

    How Bitcoin Can Change The World

    Bitcoin has the potential to not only create savings for consumer, but also to transform global transactions.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center