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some fixes to 002
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peerchemist committed Jul 27, 2018
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Peercoin is best compared with its sibling - Bitcoin; however in the following table we'll show how it bodes against something vastly different like Ethereum. Peercoin was invented as response to increasing doubts on Bitcoin's PoW consensus model with regards to its increasing centralization and conflict of interests between miners. Peercoin can be understood as a Proof-of-Stake clone of Bitcoin, though that is an oversimplification as Peercoin differs vastly - especially when it comes to economics and incentives of the system.
Major differences between the two are the fee market, ie. the absence of it in Peercoin and Peercoin's dedication to continual token distribution via PoW block rewards while the Bitcoin's distribution rate (also PoW block rewards) is reduced geometrically every four years until it becomes zero.

## Consensus algorithm

### Consensus algorithm
Peercoin is secured by Proof-of-stake type of consensus.

### Distribution
## Distribution

Peercoin is continually distributed via PoW block rewards. At the time of writing there is 24,828,480.19 PPC issued with annual inflation of 2.3%.
The `MAX_MONEY` variable in the Peercoin source code is nothing but a placeholder.
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Proof-of-Work coin mint rate is a function of difficulty, for every 16x in difficulty mint rate is halved.

## Fee market

### Fee market

The fee market provides a mechanism to decide which transactions have priority over the others. Transaction fees are claimed by the block miner in both Bitcoin and Ethereum economic systems. This provides the miners with an incentive to include transactions in the blocks they mine. If Alice wants her transaction to be included in the next block, she should set transaction fee higher and pay more then other network users, ie. outbid them. It is presumed that miners, as rational subjects, will first include transactions which carry the most Bitcoin value. If Alice pays a transaction fee which is under the average fee at the time she might wait for several blocks (or hundreds of blocks) to see her transaction included and confirmed. So, it is obvious that the fee market serves as the incentive for miners to process and include the transactions in the blocks they mine.
The fee market provides a mechanism to decide which transactions have priority over the others, and to create economic incentives for the transaction validators who usually claim the fees as rewards. Transaction fees are claimed by the block miner in both Bitcoin and Ethereum economic systems. This provides the miners the incentive to validate and include transactions in the blocks they mine. If Alice wants her transaction to be included in the next block, she should set transaction fee higher and pay more then other network users, ie. outbid them. It is presumed that miners, as rational subjects, will first include transactions which carry the most Bitcoin value. If Alice pays a transaction fee which is under the average fee at the time she might wait for several blocks (or hundreds of blocks) to see her transaction included and confirmed. So, it is obvious that the fee market serves as the incentive for miners to process and include the transactions in the blocks they mine.
With Bitcoin's block size limit set to 1MB there exists an artificial upward pressure on the price of transaction fees - incentivizing miners to validate the transactions. This is especially important as Bitcoin's economy is expected to run on transaction fees alone when the block subsidies eventually stop.

Peercoin's fees are fixed at 0.01 PPC per kb and are burned. This is equivalent to paying the transaction fee to each Peercoin holder in proportion to their Peercoin holdings since the fee decreases the total supply of Peercoins. This property eliminates the need for a fee market on Peercoin's network and allows every transaction to get included in the very next block. Peercoin retains the 1MB block size limit as it is based on the Bitcoin code, but it has no intricate need to keep it. The block size limit will definitely be increased as Peercoin's network grows in usage. Peercoin developers have already hinted that Peercoin will feature a dynamic block size in the near future.
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Bitcoin miners always start off mining an empty block, otherwise they lose the time it takes to validate the transactions and signatures, as time is money on the Bitcoin network. Only after they have validated the txns to include and have computed the merkle root, they start mining blocks with txns.
While for PoS, the time advantage is negligible as you can still use the stake hash of a few seconds ago. (hrobeers, 30.08.2017)


### Block size limit and block time spacing
## Block size limit and block time spacing

Bitcoin features the 1MB block size limits which serves to place the upward pressure on the transaction fee price, Peercoin copies this parameter from the Bitcoin but it's economic model does not depend on scarcity of the block space.
Bitcoin and Peercoin generate a block every 10 minutes while Ethereum generates a block every 12 seconds. Considering this and the block size limit of 1MB, Bitcoin and Peercoin have a transaction per second (TPS) of about seven tps and Ethereum of about 25 tps.
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