What is Peercoin?

Peercoin was launched in 2012, one of the relatively early altcoins.

Peercoin uses a hybrid proof of stake and proof of work where minters gain coins in relation to their holding and where miners gain coins in relation to the hashing power pointed at the network.  

As proof of stake is not very energy intensive – it doesn’t require solving of a partial hash inversion problem – Peeroin’s unique selling point has been its green credentials. With Peercoin they have designed the proof of work block reward to halve every time the difficulty increases sixteen times.

With proof of stake in peercoin the reward is allocated according to coin age – or the age the coins have been in an address and not used multiplied by the number of coins.

Only one hash per transaction output is performed each second – or a very low processing load. If the hash of a particular transaction output is lower than the difficulty target it can be used to mint a new proof of stake block and receive the block reward.

Transaction fees are set to 0.01 PPC but are actually destroyed. As the proof of work block reward tends to zero the primary coin supply is via the proof of stake 1% annual rate minus the transaction fees that are destroyed.

Related guides

What is Scrypt? How to store Bitcoins? What is a Bitcoin Private Key? What is Elliptic Curve Cryptography? How to create a Bitcoin address from a Public Key? What is a Bitcoin Vanity address and how do you get one? How to buy Bitcoins?

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