Innovative for its time. First ever coin backed by Proof of Stake system.
Peercoin seeks to be the most secure cryptocurrency at the lowest cost, rewarding all users for strengthening the network by giving them a 1% annual PPC return when minting.
Peercoin was inspired by Bitcoin, and it shares much of the source code and technical implementation of Bitcoin.
Peercoin does not have a hard limit on the number of possible coins but is designed to eventually attain an annual inflation rate of 1%.
Peercoin is an experimental, decentralized digital currency that enables instant payments to anyone, anywhere in the world. Peercoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Peercoin cryptocurrency is utilizing both Proof of Stake and Proof of Work systems.
PPC has been built upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in each country or socio-economic context, Peercoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.
Peercoin is one of the first successful implementations of a distributed crypto-currency, described in part in 1998 by Wei Dai on the cypherpunks mailing list, and is the first cryptocurrency to implement proof-of-stake. Peercoin mixes Pow and PoS. Peercoin's transactions, balances and issuance through SHA-256, the PoW scheme (Peercoins are issued when a small enough cryptographic hash value is found, at which point the block of transactions is added to the shared block chain. The process of finding these hashes and creating blocks is called mining). For each 16x increase in the network, the proof-of-work block reward is halved.
Peercoin is designed so that it will theoretically experience a steady 1% inflation per year, yielding an unlimited number of coins. This is a combined result of the Proof of Stake minting process, and scaling of mining difficulty with popularity. For now, Peercoin technically has a cap of 2 billion coins, it is only for consistency checking, and the cap is unlikely to be reached for the foreseeable future. If the cap were to be reached, it could easily be raised, hence for all practical purposes Peercoin can be considered to have inflation of 1% per year, with a limitless money supply.
Peercoin is designed so that variable and optional transaction fees are removed in favor of a protocol defined transaction fee (currently 0.01 PPC). The transaction fee is fixed at the protocol level and does not go to miners but is destroyed instead. This is intended to offset inflation by deflating the money supply and serves to self-regulate transaction volume and stop network spam. Hardfork and change to core protocol is required to adjust transaction fees.
Peercoin development is moving ahead at a rapid pace. Developers are planning a massive upgrade to the core protocol wallet, and it will contain the following features:
Optional Checkpointing - Peercoin uses centralized checkpointing to protect against attacks, this feature is an old remnant. The network is so big today that for upcoming versions developers will make these checkpoints optional. A future version will turn off checkpoints by default.
Peerbox - community project is being developed. Peerbox is a secure operating system for minting and running Peercoin nodes and is currently under active development.