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peerchemist committed Jul 6, 2019
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Hello, and welcome to the Peercoin Documentation website. We hope to help you understand more about this coin, its philosophy and technologies that runs behind it. Before getting too technical, we invite you to dive a little bit into the history of Peercoin, learning why it was created, and the purposes behind it.

The key innovation of Peercoin is the invention of Proof-of-Stake, a blockchain consensus algorithm that provides efficient, sustainable security and user governance, allowing for a trustless cryptocurrency network with adaptive inflation and a core focus on securely storing all types of value.

## Peercoin Genesis: 2012

Since the creation of Bitcoin (Nakamoto 2008), Proof-of-Work has been the predominant design of peer-to-peer cryptocurrency. The concept of Proof-of-Work has been the backbone of mining and security model of Nakamoto’s design. In 2012, Sunny King and Scott Nadal proposed an alternative form of consensus that was both more secure, but also energy efficient. Proof-of-Work, however is subject to centralized mining, large amounts of power consumption, and majority attacks. Centralized mining comes about due to the increased profits and production from large scale mining operations. Proof-of-Stake sought to provide sustainability and improved security through energy efficient staking and time-based confirmations (coin age). Instead of electricity and computing power, time could be used as a verification method that would prevent many of the issues plaguing Proof-of-Work consensus. Proof-of-Stake guards the blockchain, keeping users safe, while dynamic Proof-of-Work mining provides economic competition and maintains a balance in distribution. Dynamic mining and staking allow for around 1% inflation a year, making it extremely practical for long term use.
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