Peercoin (PPC) first came online in 2012, making it one of the earliest pioneering blockchains. The key innovation of Peercoin is its invention of proof-of-stake, an alternative consensus protocol to Bitcoin’s proof-of-work.
Proof-of-work blockchains are secured by proving the consumption of a costly limited resource: electricity. Proof-of-stake replaces this expensive security protocol by utilizing an alternative scarce resource: time.
Due to the cost efficient nature of proof-of-stake’s time based consensus rules, Peercoin is capable of allowing any network connected computer to participate in the blockchain’s security process. This efficiency strengthens Peercoin by growing the number of security providers and ensuring that security can be sustained over the long-term.
In Peercoin, coin owners are the ones who wield influence over the network, produce new blocks, and secure the chain. Coin holders of Peercoin co-own the blockchain and collectively decide its future through protocol voting.
This concept makes Peercoin the first blockchain capable of allowing its protocol rules to be governed directly by its users, making for a network that is more decentralized, democratic, and easily secured by people around the world.
Given that the blockchain is immutable by its very nature and all recorded data is stored forever, chain bloat becomes an escalating problem at higher usage levels which harms both security and the ability of the network to scale.
To preserve the trustless security of the blockchain and ensure its ability to scale to global usage levels, Peercoin’s inventors tailored the blockchain and its economics to fulfill the specific role of base layer settlement network.
This role focuses Peercoin development on modularity, keeping the protocol simple and secure with as few features as possible, while maintaining the blockchain as a stable base upon which any number of additional layers can be built on top.
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