Peercoin Primer #3: Benefits

Hi, I’m Chronos, and welcome to Part 3 of
the Peercoin Primer. Peercoin is one of the world’s most established
cryptocurrencies, and each video in this series will explore a different aspect of it. In this video, we’re going to talk about
what Peercoin brings to the table: what makes it stand out from the pack of competing cryptocurrencies? Have you ever wondered why Peercoin has a
green leaf for a logo? The reason is because Peercoin is so environmentally

A huge drawback for traditional blockchains
is the massive amount of electricity consumed by proof-of-work, the security model Bitcoin
uses to secure its transactions. Just to give you an idea how significant this
problem is, in the summer of 2019, researchers at MIT and the Technical University of Munich
equated Bitcoin’s power consumption with the entire city of Las Vegas. Wow. I've put a link to their report in the video
description below. But is it really necessary to consume so much
energy to secure a blockchain? Peercoin proves the answer is "no", because
it uses an energy-efficient security model.

With proof-of-stake, you only need enough
power to run your computer or laptop. This efficiency is possible because the network
is secured through ownership of the peercoins themselves, not by the wasteful and costly
operation of mining equipment. The planet is continuing to feel the effects
of pollution, and I think the topic of energy waste will become more and more important
as the blockchain ecosystem matures. Peercoin is ready with a fully tested solution
to the problem. Since Peercoin’s security is decentralized
through its coin holders, that security can be better spread geographically than proof-of-work

This is because mining is most profitable
wherever electricity is cheapest, which means you’re going to see concentrations of power
in those particular regions. This can compromise the security of proof-of-work
blockchains by making it easier for local governments to target miners with burdensome
regulations, or to shut them down entirely. By contrast, Peercoin minting can be done,
anywhere, anytime. I’ve even done it from inside my own living
room, and if I can do it, anyone can. All you need is a standard computer, and Peercoin’s
blockchain size is so small that it will easily fit on your hard drive.

On the other hand, I would not want a bitcoin
mining rig in my living room: those things are hot and loud. They’re better off inside a warehouse. Another great aspect of Peercoin’s security
is that it doesn’t depend on the market price to be stable. Let me explain: imagine if the price of a
cryptocurrency crashes. Some miners will drop out, because they can’t
make a profit anymore. The price of the coin can actually go so
low that miners would spend more money in electricity than they’d be able to earn
in coins! But with Peercoin’s proof-of-stake, the
electricity usage costs almost nothing, so minters don’t have to drop out in a price
crash. This has been thoroughly tested now in multiple
bear markets, where Peercoin has proven that its security level remains unaffected during
even the lowest points of market demand. Peercoin’s efficient security process can
actually help the network achieve long-term sustainability.

Whereas miners are forced into a position
where they need to constantly upgrade their mining equipment in order to stay ahead of
competitors, proof-of-stake security is based simply on holding coins for a certain length
of time. Since there is such little cost and effort
associated with proof-of-stake, the minter does not need to worry about earning a profit
to buy new mining equipment or pay electricity bills. This is how Peercoin’s security model is
capable of being sustained over the long-term. And finally, Peercoin’s users collectively
own the network. Owners of Peercoin can even decide its future
through protocol voting. This happens in the same way that Peercoin
is secured: you simply install the proposed version of Peercoin that you support, and
start minting with it.

Every new minted block gives you a vote for
that protocol version. All coin owners can be governors of the Peercoin
blockchain! This makes Peercoin the first blockchain capable
of allowing its rules to be governed directly by its users, making for a network that is
more decentralized, democratic, and easily secured by everyday people around the world. If you have any questions or comments, post
below the video. I’m Chronos. Thanks for watching!.

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