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. Paper Wallet

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

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

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

    Dogecoin is a peer-to-peer open source cryptocurrency and falls ...
  6. MazaCoin

    MazaCoin, a cryptocurrency launched in February 2014, is the ...
Related Articles
  1. What is Bitcoin's fair market value?
    Investing Basics

    The Easy Way To Measure Bitcoin's Fair ...

  2. Investing News

    Will Bitcoin And Walmart Force Western ...

  3. Tyler Winklevoss exclusive interview
    Trading Strategies

    Winklevoss Interview: Bitcoin Payment ...

  4. Bitcoin
    Investing Basics

    Why Is Bitcoin's Value So Volatile?

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center