Adam Dingle edited this page Nov 29, 2013 · 22 revisions

What's the difference between PPCoin and Bitcoin?

PPCoin is a cryptocurrency project forked from Bitcoin in which we aim to achieve energy efficiency and keep as many as possible of Bitcoin's advantageous properties.

Bitcoin's security relies on miners. As time goes on, Bitcoin will be forced to move transactions "off block-chain". If Bitcoin moves off block-chain, miners cannot be compensated for these transactions. If miners cannot be compensated, they won't mine. If miners don't mine, network security goes down as time goes on. As time goes on, Bitcoin may become increasingly less secure and more risky to use as a safe haven or a way to save and store very large sums of money. PPCoin's design solves this problem.

What's stake or proof-of-stake?

Stake or proof-of-stake refers to the use of currency itself (ownership) to achieve certain goals. In PPCoin proof-of-stake is used to provide minting and transaction processing in place of proof-of-work. Please refer to our design paper for details of this approach and our implementation.

The 'stake' field in the ppcoin getinfo output shows the currency amount you've currently staked to protect the network. This amount is subject to a holding period of a 520-block maturity window before you can use it again (i.e. returns to your balance after 520 new blocks).

How is it energy efficient when there is still mining?

The energy efficiency we refer to is long-term energy efficiency, as in the long term we do not require the use of energy to sustain the network.

Currently, proof-of-work remains the most practical way of providing the initial minting of a cryptocurrency, so we decided to keep it as part of our hybrid design.

From an environmental standpoint, PPCoin attempts to provide superior benefits over traditional currencies by entirely eliminating the need for conventional mining of the planet's limited natural resources. Overall, PPCoin aims to leave behind a smaller environmental footprint than would traditional "stores-of-value" such as gold and silver, all the while functioning to keep the same purpose and fundamental "safe-haven" attributes.

Why do you need central checkpointing?

As of our v0.2 centrally broadcasted checkpointing is no longer a critical part of the protocol. Its main purpose now is to defend the network during the initial growth period and help ensure a smooth upgrade path if a critical vulnerability is found. We are confident that central checkpointing can now be gradually weakened and eventually removed to achieve a similar decentralization level to Bitcoin as the PPCoin network matures.

The checkpoints are there as a security measure, and are nothing sinister. It's actually smart. If something terrible were to happen, we have the checkpoints there as backup.

When can I start generating proof-of-stake blocks?

After 30 days the network will start seeing proof-of-stake blocks. If you have a balance ppcoind will automatically try to generate stake for you. If you find a stake block the reward is 1 cent per coin-year consumed (which can be roughly understood as 1% interest annually). The reward amount is added to your stake amount and is shown together in the 'stake' field of the ppcoin getinfo output.

Because stake is withheld from spending for 520 blocks, if you need to keep your balance to spend soon we provide a configuration option 'reservebalance' to help you keep your balance from being used by stake. You can add a line 'reservebalance=10000' to [[ppcoin.conf|Installation#sample-ppcoin-configuration]] and restart your ppcoind. Then ppcoind will try to keep your balance above 10 000 coins when generating stake.

Can I encrypt my wallet?

Yes. Encrypted wallets are supported but there is a difference from Bitcoin. If you use an encrypted wallet you have to unlock the wallet in order to mint blocks. For user security we've added an option to the 'walletpassphrase' RPC command to mint blocks only. In this unlocked wallet mode, one cannot send transactions with RPC commands thus providing additional security to the wallet if a hacker gains access via RPC.

Is there a cap on the total money supply like Bitcoin's 21 million?

Unlike Bitcoin, PPCoin does not have a fixed money supply cap. This however does not mean that PPCoin is significantly more inflationary than Bitcoin. The minting design attempts to better mimic gold than Bitcoin does. Gold does not have a known money supply cap either, but we know it's reliably scarce. For many years the annual inflation of gold has been around 1-3%. In PPCoin there are two types of minting, proof-of-work and proof-of-stake. The proof-of-work minting rate is regulated by Moore's Law, which dictates that our ability in proof-of-work grows exponentially. We are aware that Moore's Law eventually has to end, but by that time inflation in PPCoin will likely already be approaching gold's level. The proof-of-stake minting introduces at most 1% annual inflation. Meanwhile, PPCoin's transaction fees are destroyed to counterbalance these inflationary forces. So overall PPCoin's minting design is still a very low future-inflation design comparable to Bitcoin.

There is a 2 billion coin maximum value in the source code, but that is only used for consistency checking and is not meant to be part of the minting design.

To be clear, the actual cap on the coin size is not pre-determined to be 2-billion; it could in fact, and is likely to end up being much lower. The actual cap is totally dependent on market interest and user adoption. Given that the network is now producing less than 300k coins per month, and less per month as each month goes by, we can easily see from the math that the coin's money supply size is very unlikely to ever reach the 2 billion cap. At the current adoption rate, the math proves it will likely take hundreds of years to reach the 2 billion coin cap, if ever. Furthermore, the PPCoin transaction fee is fixed at 0.01 PPC for every transaction; however, the fee does not go to miners' income, but is rather destroyed in order to offset inflation.

Since the 0.2 release a 'moneysupply' stat has been included in the ppcoin getinfo output so everyone can see how many coins are in the market.

Since Peercoin relies on user adoption, the following examples show what we might expect with PPCoin's Total Money Supply Curve:

Note: these are just projections to illustrate the concept, and actual money supply curve results may vary. Estimated Money Supply Curve 1

Under this assumption, the graph illustrates that eventually transaction fees could effectively offset all inflationary factors altogether.

Estimated Money Supply Curve 2

Under this assumption, the graph illustrates that eventually transaction fees could effectively offset most of the inflationary factors, but not entirely eliminate them all. It projects a minimal amount, of no more than about 1% per year inflation.

How do I generate a vanity address containing some pattern like in a Bitcoin vanity address?

vanitygen -X 55 <pattern>
Once the key is generated you can use ppcoind importprivkey <privkey> to import it into your wallet.
(courtesy of dreamwatcher)