The downside is that over time everybody loses a small percentage of money to prevent unlimited money in current.
No. That is Freicoin, not Peercoin. In PPC, the only way to "lose" money is via the destroyed transaction fees.
Also, PPC is a PoW/PoS hybrid, so traditional mining is (for now) required. "Nxt" is an attempt to create a pure PoS coin, but has not launched yet.