Peercoin

1 EUR = 0.1952 PPC 1 PPC = 5.124211 EUR

Peercoin (code: PPC ), also PPCoin or peer-to -peer Coin called, is the first crypto- currency that is based on a combination of the proof- of-work and the possession shaft principle ( proof-of- stake ).

Peercoin was released from software developers Sunny King (author of Primecoin ) in August 2012. PPCoin based on the technical principles and the source code of Bitcoin. The source code of PPCoin is also under the MIT license.

  • 2.1 Characteristics
  • 2.2 Notation and symbols
  • 2.3 algorithms
  • 2.4 addresses
  • 2.5 confirmations
  • 2.6 Money Creation
  • 3.1 Hybrid Mining
  • 3.2 inflation
  • 3.3 deflation

Introduction

At Peercoin is as Bitcoin a distributed peer-to -peer system, in which transactions are stored. In this case, each participant (peer ) a copy of the block chain ( a linked list of data blocks that contain the transactions). New blocks are automatically distributed in this network to all participants. The creation of new blocks is subject to certain conditions. A new block must be found with a certain effort. This process is called " mining" and made ​​of dedicated programs. Whether a newly discovered block is accepted and thus the block chain is received, is by consensus of participants decided (see also problem of Byzantine Generals ). Each affiliate program decides for itself whether it believes and accepts the new block to be valid. Since most participants an implementation and thus the principles of parts, creating a majority consensus. Should there be two equally valid new blocks, the longer part of the long term gain.

Reasons for the development

  • Independence from the failure of financial institutions, for example, in banking crisis
  • Independence from the failure of the state eg sovereign debt crisis
  • Independence from the failure of central banks, for example, by printing money
  • Peercoins are more energy efficient than Bitcoins in the long run and have a better network security at the same Hashrate → environmentally friendly
  • You are pseudonymous or anonymous but have a public transaction history ( block chain) → recovery of the banking Geheimnises
  • Can be made anonymously if necessary → recovery of bank secrecy
  • The time for the execution of transactions is faster than the traditional banking system. It is about ten minutes a confirmation ( makes the six confirmations recommended a total of 60 minutes)
  • Peercoins be decentralized to a computer network, which communicates each other through the Internet. They can be used everywhere, where a connection to the Internet is possible.

Properties

Characteristics

  • Symbol: PPC or Ᵽ
  • Smallest unit: 0.00000001 ( 10-8)
  • Generierungsinterval for blocks: an average of ten minutes
  • Transaction costs: currently at least 0.01 PPC
  • Reward for a block: initially PPC 5000, PPC is currently about 180 (as of November 19, 2013 )
  • Hybrid Proof of Work Mining and proof of Stake system for generating blocks
  • SHA -256 Proof of Work Mining for initial coinage
  • Proof of Stake system to increase safety and reduce the energy consumption of the network by issuing up to 1% of the existing PPCs per year for all who own PPC
  • Reduction of Reward Proof of Work Mining: halving per ver -16 - fold increase of Hashrate of Proof of Work Mining
  • Maximum coins: 2.1 billion, up to an additional 1% per year through Proof of Stake
  • Current number of PPC: PPC 20.7 million (as at: November 19, 2013)
  • Current inflation by the Proof of Work Mining: 8 % (as at: November 19, 2013)

Notation and symbols

Based on the three-letter codes of ISO 4217 PPC is currently the common abbreviation for the unit of currency. Some sites use the symbol Ᵽ. For small proportions scientific notation the unit prefix " milli " and the term is used MPPC. The smallest representable in the current log value is 0.00000001.

Algorithms

For the generation of new blocks of the SHA-256 algorithm is used for the proof-of -work. To generate a valid block, the hash value generated must be numerically less than a value determined by the network Verleich value. This new assessment is continuous and decentralized, so that a new block is created in about every ten minutes. Additionally, the age of own coins to play a role. If a certain Münzalter (Coin age) can prove ( number × age), may produce a different type of block for another difficulty applies. In this way a block can be generated with an interest payment.

Addresses

Payments are processed in Peercoin network via addresses. These consist of 34 digits. The first character is a P and the remainder consisting of numbers, uppercase and lowercase letters ( Base32 ). For example: PEzpU1mhcyTszHruA2tVi8F1krjjgtpgpW. Technically, there are digital signatures.

Confirmations

Peercoins transactions ( booking table) are recorded in a log chain. Most of the participants have a copy of the same. A transaction is considered safe if it has at least six confirmations. That is, there must be six new blocks are found and accepted by the participants. At a production rate of about one per block ten minutes into a secure transaction takes about an hour.

Money creation

New coins are generated by a process called " mining". There are two options when Peercoin. As with Bitcoin there to put into circulation with the proof-of -work principle a possibility on computing power of money. In this case, the producer of a new block is valid to a certain sum. The sum is to start 50 PPC and decreases with increasing network size. The producer is the one who selects the new transactions ( bookings with inputs = outputs) that are included in the new block. He can insert the first transaction a reservation to the value of the currently valid sum on his own account. Is the sum of the block is accepted by the participants. So money comes into circulation. It is known from Bitcoin and afterwards named coinbase transaction.

Alternatively, money can be drawn from the possession shaft principle. On the basis of the number and age ( coin age) their own coins, an alternative difficulty threshold be undercut and a new block is generated. In this block, then the producer is entitled to a so-called coinstake transaction as the first transaction. There he will sign themselves as beneficiaries. The amount is 1 % of its Münzvorrats. Here, the Münzalter ( coin age) is consumed. To prove one's own money is funneled through the transaction.

Differences to Bitcoin

Hybrid Mining

In contrast to Peercoin Bitcoin uses a hybrid algorithm from proof-of -work principle and possession shaft principle. The possession shaft principle was invented to overcome a weak point of Bitcoin. With Bitcoin, it may happen that a large organization gets a monopoly on the mining and thus the network for the 51 % attack is vulnerable. The organization can then decide on the validity of blocks and thus spend coins twice. The effect is enhanced since an exponentially increasing difficulty makes the mines for small pools unprofitable, so therefore supports the emergence of monopoly. With the possession shaft principle new coins on the basis of hoarded coins of participants are generated. For this purpose in the protocol ( block format ) the concept of a Münzalters ( coin age) was installed. There is a time stamp per transaction. If a participant, for example, 90 days past ten PPC, then he has a Münzalter of 900: Does he give out the coins, lost the Münzalter. Here, the Münzalter (product) contributes to a reduced difficulty to produce a new block. If a block generated after the owned shaft principle and included a coinstake transaction is the Münzalter is consumed.

Inflation

From blocks that were generated after the owned shaft principle, the owner receives 1 % of "interest" to his credit. This reduces the number of coins in the year increased by 1%, so over time exponentially (see compounding). The actual rate of inflation is very difficult to predict because it depends largely on the number of transactions in the network. However, inflation is - that is, not caused by mining can never be more than one percent per year.

Deflation

Peercoin has a constant transaction fee of 0.01 PPC. This fee, however, does not go to the producer of the block, but disappears. This can take a Peercoin generated an average of 100 transactions before actually uses deflation. The transaction fee is to help regulate the money supply and prevent spam.

Background information

The realization that you can build a distributed currency not only on the proof -of -work principle but also in the possession shaft principle, is the revolutionary thing and the reason for the invention of Peercoin. In this way, some of the weaknesses of Bitcoin be bypassed. On the one hand this is the mentioned 51% attack. On the other hand it comes to energy issues. While the Bitcoin network to maintain the function after large computing power and thus energy is thirsty, the Peercoin network can work in the long term only with the energy of the participants Software. This is because that with increasing size of the network decreases from the payments generated by proof-of -work principle blocks to zero and only the blocks now be generated after the owned shaft principle. This allows the production without significant computational effort, since the justification alone is the Münzalter a subscriber. Thus, the long-term nature of the network is to be guaranteed and incidentally also saving energy.

The fact that there is the proof-of -work principle in Peercoin, is an initially rapid creation of money and could theoretically be omitted for the sole benefit of the possession shaft principle. However, this would be circulated by the Genesis block at least one PPC. But it makes a reasonably equitable distribution at the beginning possible.

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