Quote from: dnaleor on August 20, 2015, 01:32:45 PM

Peercoin: this is a good hedge against a flaw in PoW because it also has PoS combined with PoW. Seems a more secure solution AND it has the first mover advantage in the PoS space. But it doesn't offer anything else. And theoretically PoS could be implemented in BTC if needed (although unlikely).

It seems many people believe Peercoin is simply a PoS clone of Bitcoin, but they couldn't be more wrong. Sunny King designed Peercoin with a different purpose or role than Bitcoin. I'd like to talk about this aspect of Peercoin's philosophy that I think many Bitcoiners don't realize, but first I'm going to post some quotes from a couple days ago about the block size debate, one of them from Bitcoin Core Developer Gregory Maxwell...

Quote from: jubalix on August 21, 2015, 09:28:05 AM

Quote from: gmaxwell on August 21, 2015, 06:18:00 AM

Quote from: AgentofCoin on August 21, 2015, 03:23:51 AM

Do we want it to handle all world daily transactions,
or do we want protection from current monetary systems and government involvement?

If we achieve the second, we can have both. But if we only achieve the first, we likely cannot have the second (and wouldn't find it to be a substantial improvement over the fiat systems we have now, even if).

The reason for this is that if Bitcoin is secure and trustworthy, trustless decenteralized micropayment facilities can be built on top of it and extend Bitcoin's transaction security with arbritary speed or scale. But if the system is fragle and underminable by attackers (government or otherwise) then it won't be robust enough to underpin these things.

(and things like micropayment channels were't my invention, they were recommended by the system's creator-- thats part of why Bitcoin has smart contracts to begin with.)

whats interesting is Peercoin Achieves the second, now by design.

It heads of the whole Block size issue by going for the backbone, which is now becoming the problem for BTC as it tries to be 1 and 2, without being 2 first.

It seems that something like peercoin will take the lions share of large value transactions and BTC is falling into the middle of not being doge Ie doge can handle a high TPS at sacrifice of security [but who cares when your buying an ice cream and dont get hit up huge credit card fees], and not being good as a backbone.

Dont get me wrong I am a hardened BTC supporter, its just the boundary conditions do not support backbone currecy as well as Peercoin and so a debated like this rages.

I have being saying this for some time now, and it has come to fruition.

Just in case anyone is not clear on what Jubalix is saying here, Sunny King coined the term "backbone currency" in an interview on October 24th, 2013 where he laid out his vision for Peercoin and explained why he designed it the way he did. In his quote, Gregory Maxwell is describing Bitcoin as a backbone currency when Sunny King designed Peercoin to fulfill this exact role. Here is Sunny's main quote on this topic...

https://www.peercointalk.org/index.php?topic=2218.0

Quote from: Sunny King

"Both PPC and XPM are designed to last. PPC is designed with energy efficiency, XPM is designed with energy multiuse. Bitcoin has a long term uncertainty as to whether transaction fees can sustain good enough level of security. Before that the main concern is how to balance transaction volume and transaction fee levels. Currently I get the feeling that bitcoin developers favor very low transaction fees and very high transaction volume, to be competitive against centralized systems (paypal, visa, mastercard etc) in terms of transaction volume, to the point of sacrificing decentralization. This also brings major uncertainties to bitcoin's future.

From my point of view, I think the cryptocurrency movement needs at least one 'backbone' currency, or more, that maintains high degree of decentralization, maintains high level of security, but not necessarily providing high volume of transactions. Thinking of savings accounts and gold coins, you don't transact them at high velocity but they form the backbone of the monetary systems.

Pure proof-of-work systems such as bitcoin is not 100% suitable for this task. This is because transaction fee is not a reliable incentive to sustain network security. If the mining generation amount is kept constant (there have been several such attempts in altcoins) it would work better security-wise but then it would also significantly weaken the scarcity property of the currency. XPM's inflation model is designed in such a way that it could serve as backbone currency better than bitcoin if needed, because it could maintain high security reliably for longer, with reasonably good scarcity property as well. Of course that's only from architect's point of view, whether or not it would be chosen by the market is a whole different matter.

PPC is designed to serve even better as a backbone currency. The proof-of-stake technology in PPC is not only energy efficient; it also maintains high level of security without relying on transaction fee. Thus PPC could be safely designed with strong scarcity property yet serving well as backbone currency. Both PPC and XPM use protocol enforced transaction fees, which reflects my preference that high transaction volume is discouraged in favor of serving as backbone currencies.

Right now if we are talking about micropayments in the US$1 range, both PPC and XPM still handle them with much lower overhead than credit card network. In the long term micropayments should be provided by centralized providers, or a less decentralized network optimized for high capacity transaction processing.

On the other hand there is no promise that minimum transaction fee wouldn't be adjusted. If processing capacity of personal computers continues to advance at the current pace, both max block size and minimum transaction fee could very well be adjusted at some point. However I do take a very cautious approach to adjusting transaction fees, as opposed to bitcoin devs. The impact to the fitness of the currency as a backbone currency is of great concerns to me."

Therefore, Peercoin is designed first and foremost as a secure store of value which prioritizes decentralization over speed and transaction volume. This is the definition of a backbone currency. Further, Sunny said in the quote that large volume and high-speed microtransactions can be achieved by using off-chain networks, which could range anywhere from centralized solutions to semi-decentralized to trustless. This allows Peercoin to remain a highly decentralized network and store of value while the majority of transactions take place off-chain.

Peercoin just turned 3 years old and its blockchain is only around 400 MB. This is a result of Sunny King's very specific design. The Peercoin community has been promoting these ideas for a long time now. It seems that certain people are only now starting to realize the importance of them.