Could Peercoin and “Proof-of-Stake” Turn Bitcoin Into The Myspace of Cryptocurrency?

peercoinThe thought alone is blasphemy to some..

As crypto explodes and segregates into multiple camps – all touting the supposed superiority of their respective coins – Things are starting to feel very “tribal”, to say the least.

Discussion of Bitcoin alternatives usually ends up with emotional investment, getting in the way of logical progression.

As much as we support Bitcoin – as not only a high tech financial instrument, but also an ideology – it remains important, especially if there’s skin in the game – to keep the open minded approach that made Bitcoin possible in the first place.

And while it does seem likely that Bitcoin will retain it’s position of dominance in the digital currency realm for the foreseeable future..

Anything can happen, and it’s seems rather prudent at this stage of the game to maintain an unbiased, and open perspective – making sure to logically consider all developments and possibilities.

There is certainly a plethora of both.

One of the more promising of these is Peercoin, a hybrid proof of work / proof of stake coin that attempts to evolve the Bitcoin protocol and in doing so; solve many of the potential problems that could lay on the horizon for Bitcoin.

Below, we’ll attempt to layout the fundamentals of Peercoin, how it differs from Bitcoin, and do what any good crypto enthusiast does: speculate. 

Will The “Network Effect” Be Enough For Bitcoin?

When researching the topic of  Bitcoin –  the term “network effect” is bound to pop up. The network effect is simply the advantage gained from being the first mover in a specific market. More specifically, it’s the collective habits of a large group of users that constitute the network effect, and provide it’s distinct advantages.

In this case Bitcoin was the first to market, and as such holds what could very well turn out to be insurmountable. And while the network effect is nothing more than people’s psychological aversion to change.. don’t underestimate the difficulty in overcoming a competitor with such an advantage.

If the market demands change and Bitcoin fails to evolve and adapt… the network effect will do little more than slow the shift in market share. With that said..  to “evolve” to meet specific market demands, Bitcoin might have to abandon attributes that make it Bitcoin in the the first place. Also, it seems the community may be realizing that making fundamental changes to the Bitcoin protocol  is a complex and unrefined process.

Therefore, if there were multiple and various needs and uses to arise for cryptocurrencies (which seems rather likely) and Bitcoin is incapable to fill all of these needs (which also seems likely) then there would be space in the market for other alt coins. Meaning the network effect would mean very little to the alt coins the targeted such market gaps properly.

Peercoin Isn’t Just Another Bitcoin Clone..

Regardless of your opinion of Peercoin, if you have one at all, it definitely sets it’s self apart from Bitcoin by incorporating key changes into the protocol.

In reality, most crypto-coins are an imitation of Bitcoin in a fundamental fashion, but once you take the time to understand precisely how Peercoin has differentiated itself to be positioned within the crypto market – You’ll realize just how dramatically different it is, and that it very much stands on it’s own in terms of innovation contributed to this digital currency evolution.

The backbone of cryptocurrency?

Much like how you’ll likely run into the term “network effect” with Bitcoin, the term “backbone” seems impossible to avoid. Sunny King, the anonymous developer behind peercoin, designed it to exist in conjunction with other digital currencies. As such, the term backbone makes a good bit of sense.

This differs from Bitcoin, which attempts to exist as the sole proprietor of the cryptocurrency technology. In fact, that seems to be the opinion of many Bitcoin advocates – that really only one coin is needed in the economy, and anything else is nothing more than technological redundancy.

It seems obvious by now that there will be far more than one single crytpocurrency around for quite some time. As the market matures, they’ll all mold to coexist with each other – This, of course, remains to be seen, but either way, Peercoin is designed to play a specific role in a developed future ecosystem of cryptocurrency, and if it succeeds in that role it could become better than Bitcoin at one important function – a long term store of value.

And this is where many confuse Peercoin’s future and potential, as it’s often cited that Peercoin doesn’t function well for day-to-day transactions – and therefore isn’t of much use a cryptocurrency. Or that’s how the narrative goes, assuming a “one crypto take all” scenario. While it’s true that purchasing a new laptop computer on isn’t what Peercoin is best suited for, and that’s intentional in the design, it’s because it is intended to be used in tandem with other coins that’s fee structure and transaction times are far better suited to smaller, more frequent transactions.

In designing Peercoin, SunnyKing assumes that the crypto landscape will indeed resemble current financial markets. In that multiple financial instrument will differentiate themselves enough through various mechanisms such as interest rates and fees, among other things, in order to provide enough value on their own merit to justify a place in the markets for themselves.

If this indeed turns out to be the case, then Sunny King’s foresight could prove ingenious and Peercoin could very well adapt to become the “backbone” of cryptocurrency. In effect, Peercoin or “PPC” looks to be the bonds and treasuries market of the crypto world.

The .01 PPC fixed transaction fee.

The transaction fee is a fundamental function in a coin and significantly affects the position it takes in the market. Peercoin’s transaction fee is cited by many as the sole reason that the coin could fail. The assertion being that the fact that the .01 PPC fee acts as a deterrent from making transactions, and therefore, what’s the point?

One thing to point out is that the fee is actually fixed per kilobyte of transaction data, not per transaction. Which means that Peercoin’s transaction fees are actually steeper than most think. In other words,  most PPC transactions will result in a transaction fee of .01 PPC, but a transaction that exceeds the 1 kb threshold would result in a fee double, triple, or even ten times as high that. Essentially .01 fee is a minimum, and this has absolutely profound implications for PPC as a useful financial instrument.

Especially as PPC presumably grows in value. Currently, as PPC currently sits at a value of around $5.00 – That would mean that a .01 PPC fee (5 cents) would be reasonable if you wanted make a smaller purchase with it. But what if PPC reaches a value of $1000 USD? A minimum fee of $10 would certainly make buying your groceries via your Android PPC app very inefficient, to say the least.

At this point, we’ll remind you that Peercoin’s poor suitability for frequent transactions was intentional, and could potentially provide some much needed stability to the cryptocurrency markets. It is truly intended for use as a long term store of value. Admittedly, it does seem somewhat puzzling at first that transaction fees are set to operate in the manner that they do.. but after seeing the bigger picture, and how the fee works in cooperation with interest that incurs simply for holding your Peercoins, it all starts to make a bit more sense.

For one, the fee mechanism could potentially calm much of the volatility seen in Bitcoin. This is huge, and one of the main reasons Bitcoin hasn’t been as widely accepted as should be at this point. Market volatility has been an ongoing trait of the crypto markets and Peercoin looks to be the solution that’s needed. The transaction fee combined with the slightly inflationary nature of PPC could simultaneously provide deterrent of transactions, and incentive for holding, providing the stable, less volatile currency that could actually serve as the “backbone” of the market.

In short, the transaction fees only seem out of place before you realize exactly what Peercoin is attempting to become. A mechanism that increases the currencies stability is rather desirable once you understand that PPC is meant to serve as a type of “buffer” for the entire crypto ecosystem – and that’s exactly what the “high” fee does.

It also means that if PPC ever soars to $10,000 (only exploring hypotheticals, here..) then buying $100 worth of PPC would do nothing more than cover your transaction fee. This creates an interesting dynamic and fairly high barrier to entry that even further demonstrates Peercoin’s intent  to serve as a long-term store of value, rather than a transfer of value.

Earn 1% PPC just for holding/securing the network.

One of the benefits of proof of stake, in regards to Peercoin, is that simply by holding your coins and verifying your stake in the network, your stake will grow by 1% annually. This is made possible because, as a stake holder, you become the “miner” and will rightfully be compensated for doing your part in securing the network.

So if you’re holding and minting (minting is basically mining in proof of stake) 100 peercoins for an entire year, you will automatically receive an additional one Peercoin in the form of interest. If you hold 1000 PPC, you will, of course, gain 10 additional PPC as interest for the year. At a current value of  $6 per coin, we admit that hardly seems like incentive. But lets say PPC reached $1000 USD – that would mean that you would incur an extra thousand dollars a year simply for holding on to your 100 PPC, and allowing your “stake” to do it’s part in securing the network.

This puts Peercoin in an interesting new class of cryptocurrecies and shoudn’t be underestimated in significance. Much of the debate in Bitcoin value is that it currently has very little use other than speculation (although that’s changing fast), and such will remain the case until Bitcoin has proliferated the online economy to where the amount of transactions justify the price. Peercoin on other hand has already attained as much exposure as it will ever need to be valuable on it’s own accord, as it already does something inherently valuable: it grows.

Another effect of the 1% interest is seen in Peercoin being slightly inflationary by nature. We’ would be quick to point out that this can be somewhat misleading if you don’t take the entire mechanism into account. Most associate inflation of money supply with hyper inflation that has been seen in fiat currencies, and assume any inflation is bad inflation. Not necessarily. There are far more factors to take into account, when judging the viability, and valuations of an asset, digital or not. Not to mention that there are actually more than one inflationary mechanism that would need to be considered.

For example, compared to Bitcoin – Just because the Peercoin is inflationary by nature, and Bitcoin isn’t – says nothing about the current  growth rate of the money supply, which has far more immediate effects on market valuations. So while Bitcoin may have a hard cap at 21 million coins, and while Peercoin will technically never reach a hard cap at all.. that says little of the current growth rate of the coin supply.

Here’s a chart comparing the growth rate of the coins supply for both BTC and PPC – as you can see, that while PPC is indeed the inherently inflationary coin, the supply of new coins coming into the market is dwindling far faster than Bitcoin’s. We can only assume this will eventually be reflected in the price. Assuming the crypto market was rational, which it certainly isn’t at this stage, so it’s difficult to extrapolate.


We’re not arguing that Peercoin’s slightly inflationary nature is either a positive or negative feature  for a cryptocurrency. Only that inflation isn’t inherently a bad thing as many may assume. It’s centralization that enables the abuse and manipulation of inflation that is inherently a problem. The bottom line is PPC’s inflation rate is purely a function of the holder of the coins receiving that 1% interest for securing the network. This is good inflation, and one of Peercoin’s many strong suits. So while the money supply grows.. just like dollars, the main difference is the fact that your stake in said money supply grows, as well. So there is inflation in the money supply, but no purchasing power whatsoever is lost by the coin holders.

Neat trick… Maybe the fed will start giving me a large enough tax refund to offset the inflation incurred on the dollar throughout the year, as well.

The implications of proof of stake.

The difference between proof of stake and proof of work is not only significant, but also the main differentiator between the leading contenders for the crytpto currency title belt. Albeit, a fairly nuanced and difficult topic, it’s a concept that should be fundamental knowledge that’s considering investing in the crypto coins.

To start, something that many don’t realize is that Peercoin is very literally an evolution of Bitcoin. Proof of stake was born out of concerns that a full proof of work system, such as the one Bitcoin utilizes, could be fundamentally flawed in that miners won’t have sufficient incentive to keep the network secure when block rewards inevitably diminish. This unknown hypothetical has become known in Bitcoin circles as “The Tragedy of the Commons”, and is one of the major long-term problems with Bitcoin.

That said, a fully proof of stake system has it’s potential detriments, as well. Mainly, the initial distribution of the coin supply is rather difficult if you take mining out of the equation. There are full proof of stake coins such as Nxtcoin that have attempted to accomplish the difficulty of initial distribution of a full proof of stake coin by simply selling the initial coins in an ad hock ipo of sorts. We’ll talk more about this, and Nxt, in general, in an upcoming article, but for now..

Peercoin takes the approach of combining the “best of both worlds”, and holds the distinction of being the first hybrid PoS/PoW crypto coin. Peercoin started off being mined just like Bitcoin, then will gradually transition to a mostly proof of stake platform. This allows PPC the considerable benefits of PoS while still maintaining an initial distribution that’s widely considered fair and acceptable for a decentralized digital currency.

Does energy consumption matter?

We certainly can’t definitively answer that, as it seems to be a matter of perspective more than anything else. But it does seem rather inevitable that it will eventually become a heated issue. Whether it should be or not is up for debate and entirely irrelevant to those will most likely use it as a talking point to grab ratings, or page views. It would only seem to align with the current political climate, that Peercoin’s ability to claim itself to be the “green” and “sustainable” coin will indeed turn out to be a considerable asset.

Recently, Forbes reported that the Bitcoin network currently costs north of 15 million dollars a day, and stories like this are likely to become more and more prevalent as the mining network gets larger, and thus consumes vastly more electricity and resources. The movement against Bitcoin energy consumption is only just getting started, and since Peercoin effectively alleviates the energy problem all together – things could get interesting.

While, due to it’s hybrid proof of work and proof of stake design, Peercoin currently does require mining and electricity, but it’s designed to transition away from PoW (requires mining) completely, as soon as there are enough stake holders to secure the network with a fully PoS system. That means that the electricty bill for PPC will gradually decrease, while BTC’s bill will only continue to climb to potentially absurd levels.

It should be pointed out that currently, the amount of electricity Bitcoin uses is absolutely minuscule compared to the amount of energy wasted on fiat dollars. Everything from the materials, to manufacturing, to printing, to prosecuting and imprisoning counterfeiters.. the costs are enormous. Bitcoin’s electricity bill is far smaller than Fiats’s, but that could change if Bitcoin goes to the heights that many say it will

The rich get richer problem.

Some think that proof of stake is problematic in that your reward for securing the network, is based solely on the amount of stake (number of coins) that you hold. Obviously, if someone is earning 1% interest on 100 PPC, and another person is earning that same 1% interest on 10,000 PPC – then the individual holding the 10,000 coin stake will indeed be receiving more Peercoin’s annually.

Just to demonstrate this isn’t some fringe belief, here’s how the lead Bitcoin developer feels about PoS:

Twitter   gavinandresen


When trying to come to a conclusion on this topic, we’ll admit that it is rather a difficult thing to do.  

On one hand, Peercoin does allow the largest stake holders to be rewarded the most, but does it not stand to reason that an individual that does more to secure the network, should be compensated more? And how does this differ from the richest individuals being able to spend the most on mining equipment, and therefore giving them an advantage in mining Bitcoin? Is that not the same “rich get richer” mechanism in place?

Furthermore, the way in which the 1% inflation never erodes the buying power of PPC, is the same way that PPC allows larger stake holders to be rewarded more, while avoiding awarding the larger stake holders a larger percentage of the PPC money supply. And that’s the key point. While yes – they were awarded a higher number of PPC coins for holding a larger stake… it is offset due to the fact that said coins are ever so slightly inflated.

It seems to us, that the rich never get richer within the Peercoin ecosystem, and only reap a larger reward when cashing out into fiat dollars. Even then, the argument could be made that a larger reward was deserved due to a larger risk assumed.

All in all, if the “rich get richer” problem is what most are concerned about in regards to Peercoin, we’re not sure we share the same sentiment. 

ASIC mining end result is Bitcoin centralization.

Sad but true. When Satoshi Nakamoto created Bitcoin, it’s likely he didn’t anticipate the arrival of ASIC computers designed specifically for mining. ASICS  have simply changed the game, and now BTC mining is prohibitively expensive and is becoming more centralized everyday.

Mining pools have started to garner so much of the hashing power that they could potentially pose a threat to the network. This is no empty, down the road threat either. A quick check of Reddit will produce multiple current accounts of concerns of the largest BTC mining pools coming dangerously close to controlling 51% of the hashing power.

If you’re not familiar, if any one entity gains 51% of the BTC network hashing power, then it can attack the network and cause unknown damage. Whether one of these attacks will ever actually occur or not is unsure, but the fact that the mining aspect of Bitcoin puts control of the value of the network into the hands of a few pools, and makes it susceptible to centralization, is a real cause for concern. Because if history is to serve as an example, then if it can be centralized, then it will be.

Centralized checkpoints in a decentralized currency?

While the “rich get richer” problem is often cited by many as the fundamental flaw that will ultimately hold PPC back, from our research that doesn’t seem quite accurate.

While we’re more than okay with the accrual of interest on whatever PPC we hold – There is one aspect of Peercoin that seems like a potentially serious drawback to the young digital currency.. The centralized checkpoints. We say “potentially” because the checkpoints are actually a comforting feature to anyone holding thousands of dollars of PPC.. That said, they could also turn out to put a serious damper on PPC’s growth.

The anonymous developer/s of Peercoin, chose to include a mechanism in the code that acts as a safeguard of sorts against attacks on the network. If you’re not not all too familiar with the crypto world – an attack on the network of an up and coming alt coin is not only a real threat – but a reality for several coins already. The severity and effects of such attacks vary, but nonetheless.. enacting a back-up or checkpoint system in Peercoin is a potentially very attractive feature for those that fear losing some of their precious PPC to the attacks of an opposing alt coin community. 

So what’s the problem? Well, there isn’t one yet and there may never be. It’s a bit of a catch 22.. The official plan laid out by the developer is to phase the checkpoints out as the Peercoin network grows large enough to deter most would be attacks due. All of that sounds like an excellent plan and it’s implementation make sense, but the fact is that as it is currently, the Peercoin network isn’t fully decentralized. That’s a big turn off to a lot of investors.  You don’t want the developers of a digital currency to have too much control over your coins, anymore than you want the banks, lobbyists, and other regulation twisting entities to have too much control over your real world assets. 

So, while we certainly appreciate the added security of the checkpoint system, and are even glad that it’s currently there. PPC can never be taken completely seriously as a crypto currency until those check points are phased out of Peercoin, altogether. This move is apparently slated to be included in the next release of the client download. happening in the coming months, and we can only expect that a price surge will accompany it. 

While we’re not at all saying PPC isn’t worth buying until the checkpoints are removed, we are saying that if you choose to convert a portion of your precious BTC into PPC then this is definitely one of the main things you’ll want to keep an eye on when evaluating your holdings and investments. 

Not even a year in, and PPC’s growth can’t be ignored..

That seems a important point. Peercoin is still incredibly young, and assessing how things could possibly play out in the future between Bitcoin, Peercoin, and Litecoin is akin to picking the bottom of the market in the middle of a China induced Bitcoin crash.. It’s not an exact science, to say the least. Disclaimers aside, it does seem likely that proof of stake will slowly gain more acknowledgment as a distinctly different alternative to Bitcoin.

Whether proof of stake can prove itself superior to proof of work, remains to be seen, but the comparison will most likely be put to the test. That’s the beauty and efficiency of the free market. Features such as improved energy efficiency, increased long term network security, and interest accrual by coin holders, are likely to garner much more attention as the young digital currency matures.  

Looking at current trends, Peercoin looks promising and is poised to continue it’s recent upward surge. Just how far upwards the surge goes is anybody’s guess, of course.   Here’s the market capitalizations of BTC, LTC, and PPC over the course of the last couple of months: ppccomparison And here’s the chart for PPC against Bitcoin, dating back to mid October:    

PPCBTCtrendlines  The trend seems pretty clear at this point. While that speaks more to Peercoin having the very promising fundamentals of a great investment, more than it does about it becoming a Bitcoin killer.. Admittedly, Bitcoin going the way of Myspace may be a bit sensationalist… it’s far from unthinkable, though, and many are placing bets that it will.  

If Peercoin successfully positions itself as being superior to Bitcoin at functioning as a long term store of value, like it technically is…  and with Litecoin’s scrypt based technology potentially being better suited than Bitcoin as a transactional digital currency (or.. GASP.. Dogecoin?)- Then it certainly seems plausible that a set or even group of cryptocurrencies that function in tandem to provide a faster, more secure, and more efficient financial platform than a single crypto that attempts to function as a stand alone solution – Could pose a threat to Bitcoin’s position on the throne. 

At the very least, current trends indicate that the market share required to reach a predicted $40,000 Bitcoin valuation, will be allocated amongst more than just Bitcoin alone – Which could affect the price in an undesirable way.. So, for those that aren’t diversified in the within the crypto-markets.. now might be a good time to consider doing so. 

If you enjoyed this article – Be sure to follow us on Twitter and G+… Thanks for reading.


  1. maka says

    Fantastic article. Got everything right.

    One possible missing point is about the block chain size. The 0.01ppc transaction fee prevents peercoin’s block chain from bloating. As a comparison, currently btc’s block chain is 12G, ltc 2.2G, ppc only less than 300M. If btc or ltc wants to take a market place for micro transactions, their block chains will become MUCH larger, to the point not many users would rather not download the whole block chain. This will make the cryptocurrency less decentralized. With ppc’s fixed 0.01ppc transaction fee, peercoin’s block chain will not have this scalability problem. Even a normal smart phone can become a potential FULL node of the peercoin network.

    • Shane Dark says

      Hey maka, thanks for the kind words! It’s a big subject to tackle, so I appreciate it.

      As for your point about the transaction fees limiting block chain size – it’s certainly a good one… I could see that being a serious advantage, although I do feel like third party services will figure out a way to compensate for the bloated block chains of BTC and LTC. Also, if PPC is admittedly not intended for small transactions, does it even matter that the block chain is resistant to becoming too large due to micro-transactions? So while the block chain won’t get bloated due to micro-transactions, it would most likely never matter because the fee would simultaneously deter micro-transactions in the first place.. Right?

      If i’m missing something here, please do fill me in.

      Either way, thanks for the comment.

      • maka says

        Thanks for the reply Mr. Dark! I can’t say with great confidence that I already think through the whole issue. Just from some observations around me, many people complained that it takes forever to synchronize with btc’s block chain when they install bitcoin’s client for the first time(it takes one week). Of course people can choose only to install some online wallet instead. But with peercoin they can easily have both choices. If third party services are crucial for micro transactions, doesn’t it make peercoin also a competitor even in this market? The bitcoin community paid a lot of efforts to tune their fee system. If eventually it must relies on third party services to compete with visa, papal etc. then it kind of lose its supposed advantage ( decentralized secure network ), right? I think peercoin’s design already implied the idea that the current cryptocurrency technology is not cut for microtransactions in the first place. So it seeks a different purpose from the very start. Maybe in the future there will some technical advance to change this paradigm but I don’t know. Bitcoin’s central idea is to keep EVERY transactions in record and keep it public. Unless there is some radical change to this idea, otherwise the block chain bloating issue will likely continue to exist without compromising some of its merits (decentralization, security…).

        I might overestimate the severity of this aspect though, like I said, I haven’t thought through the whole issue. Maybe the network speed and storage increase will catch up in time, who knows.

        • Shane Dark says

          Hmmm… Damn good points, man.

          It certainly does seem as if a reliance on third party services to manage the potential micro-transaction issue is potentially bad for the decentralized status of Bitcoin.

          Will have to think more on the topic..

          • Neferius says

            Does the 0.01 fee REALLY shorten the blockchain when applied? Or does it simply mark those coins as unaccesible?
            I have been unable to find any concrete evidence to confirm or deny this, and the outlined whitepaper is really blurry on the specifics.

  2. Crypta says

    Damn bro.. seriously well written article on a deep/tough topic. Good job!

    Followed on G+ and will be waiting to read the nxt article you said was coming up soon.

  3. Altoid says

    For the love of God, please proofread your articles.

    its = possessive
    it’s = it is

    You misused the word and typed “it’s” more than I could count, because when in doubt, use an apostrophe! Amirite???

    You also did the apostrophe-s thing to make a plural. Come on. This is 3rd grade grammar school stuff.

    “The transaction fee is a fundamental function in a coin and significantly effects the position it takes in the market.”

    Effect = noun
    Affect = Verb

    You skrewed that up too.

    • Shane Dark says

      Lol.. didn’t really want to approve this comment but in the spirit of fairness..

      I apologize for the careless use of apostrophes, sir.. I do hope you got something valuable out of it, at least. Anyways, you took time to read and critique the article, so thanks!

    • Shane Dark says

      Hey Dustin – No problem. I had the same initial reaction as you concerning the fee. Thought it was prohibitive… That’s before the whole “backbone” thing comes into play. It’s really quite genius.

  4. John Silversmith says

    I applaud you for researching and writing a fantastic piece. I am telling my VC friends to look into Peercoin. Keep up the great work.

  5. Eugen says

    “.. only reap a larger reward when cashing out into fiat dollars”. Not even this is true: the market will revalue the currency according to the increase in coins. Imagine if everyone’s US dollars suddenly multiplied by 100 – their exchange value would rapidly reduce by 100 times. The “rich get richer” is a non-issue.

    In fact, Peercoin’s (like Primecoin’s) long term scarcity model, which is not as strong as Bitcoin’s, arguably makes it a fairer currency than Bitcoin (see Sunny’s interview with Vitalik Buterin).

  6. Mark says

    Might be an idea to mention that transaction fees gets rewarded to the miners in Bitcoin, but in Peercoin they get destroyed. So Peercoin has a deflationary force aswell.

  7. FreeJack2k2 says

    Peercoin is broken, it will never succeed as a currency and you have pretty much made the case for why in your article. It was a predominantly apologist piece trying to discount peoples very valid reservations about almost every aspect of the protocol. A crypto will not be successful simply by virtue of being different than Bitcoin. It must improve upon Bitcoin in a meaningful way and Peercoin improves is actually a downgrade in most respects.

    • Shane Dark says

      I obviously disagree..

      You say it will never succeed as a “currency” and I would have to agree.. but it isn’t intended to succeed as a currency. The problem I have with the notion that all other coins except Bitcoin are somehow doomed to failure, is that it assumes that all coins are competing for the same markets. They simply are not all aiming to be “the currency that was accepted by Overstock”… A crypto can “improve upon crypto in a meaningful way” even if it’s never excepted by a single retailer – which is how it seems most classify something as a currency – whether or not it’s spendable.

    • John Silverman says

      You just said a bunch of generalizing negatives without any substance. Feeling threatened by a competing crypto currency is one thing, debating with style is another.

  8. Shane Dark says

    Hey, thanks for the thoughtful reply..

    You bring up extremely good points and ones that I honestly hadn’t considered yet. It’s mind blowing to me that the Bitcoin network is already at $44 per transaction.. That seems insanely high, but maybe I’m missing something here. Will definitely look more into that and possibly do an article strictly on Bitcoin’s potential fee problem.. Also known as “tragedy of the commons”.

  9. JohnD says

    How does hardware count toward the proof of stake? What is the incentive for anyone anywhere to contribute expenses of operating hardware to keep the network alive?

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