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Know what problems are solved by Peercoin that BTC is unable to solve due to its hard limit.
PPC is a Cryptocurrency that the process of mining can generate. The crypto is currently priced at $3.24 and has a current supply of almost 26,944,175 coins. It has increased by precisely 267% within a week and is currently ranked at #424 in terms of market capitalization.
Launched in 2012, Peercoin is based on the Bitcoin framework. The currency also offers complete anonymity and is decentralized like other cryptos. It uses the proof-of-stake consensus mechanism, unlike Bitcoin, which uses the proof-of-work algorithm. Proof-of-work consensus mechanisms are secured by using the energy. In contrast, Peercoin’s Proof-of-stake mechanism utilizes the scarce alternative resource for securing the protocol, and this resource is time. It uses the time-based consensus rules and can allow any network-connected computer to participate in the security process of blockchain.
The exciting thing is that Peercoin uses the proof-of-work mechanism for the distribution of coins. The consensus strengthens the decentralization of the network via a wider distribution of Peercoin. The network focuses on preserving the immutable and trustless nature of Peercoin by providing scalability, user governance, efficiency, fair distribution, and sustainability.
Bitcoin has a hard limit. As the value of BTC rises in the future, individuals will not be incentivized to spend their BTC but to save these. For working as a medium of exchange, Bitcoin should have a level of inflation, and the BTC users must be incentivized to sell and buy other goods without worrying about the increase in purchasing power.
Here, Peercoin doesn’t have a hard limit on total coin supply. Due to which it can act as a store of value and a medium of exchange. The participants determine the inflation rate for Peercoin. In the case of Peercoin, the block reward drops proportionally with the increase in the hash rate in the Peercoin network. In simple words, the growth is balanced by a level of deflationary reduction to the output. This dis-incentivization forces a decrease in output, due to which hash rate and coin production return to an equilibrium point. The inflation rate is pinned to the hash rate of available hardware, and it is pretty great thinking because the hash rate would increase with time.