block chain software

Peercoin was the initial Bitcoin-based monetary system to utilize proof-ofstake as a mechanism to make certain a unique integrity. However, there
are a few objections to Peercoin's proof-of-stake model. This article
presents those objections along with a similar system redesigned to
address them. Block Chain

In a simplified version of Peercoin's proof-of-stake design, each node can

use section of its balance as a stake and can chain blocks. Greater that
stake, the more chances this node has of increasing the block chain. The
reward for chaining blocks is 1% of the used stake as newly minted coins,
annually. Conversely, making transactions requires paying a fee that
destroys 0.01 coins per transaction. For instance, after having chained a
block using one coin of stake, Bob makes one transaction. Then, the fee
of 0.01 coins he pays for making this transaction destroys the 0.01 coins
he minted in reward for chaining that block. blockchain

Here are five objections to this proof-of-stake model:

It amplifies wealth inequality. Suppose Peercoin is the only kind of money

for both Bob and Alice. Bob's income is 200 coins per month, while his
expenses are 80% of his income. Alice's income is 800 coins per month,
while her expenses are 50% of her income. Assuming, for simplicity, that
neither Bob nor Alice has any savings -- which Alice is prone to have -Bob and Alice will be able to reserve 40 and 400 coins as block-chaining
stake, respectively. Then, Alice's block-chaining reward will soon be 900%
greater than Bob's, even though her income is just 300% greater than
his.

It makes the amount of money supply unstable. Inflation becomes

directly proportional to successful block-chaining rewards, yet inversely
proportional to paid transaction fees. This variable inflation adds a
needless supply of price instability to the rather inevitable ones -exchange value of merchandise and velocity of money circulation -- thus
unnecessarily reducing price transparency and predictability. Peercoin
must have a stable money supply, as Bitcoin could have after year 2140.

Whenever total paid transaction fees are less than total successful blockchaining rewards, all inactive or unsuccessful block-chaining nodes will
probably pay a fee to all or any successful ones through inflation. This
implicit value transfer disguises the price of participating in the system.
As coins upsurge in value, the (now 0.01 coins) transaction fee will
eventually become too valuable, thus requiring Peercoin developers to
lower it. However, choosing its new nominal value is definitely an
economic decision -- rather than technological one -- which creates a
political problem. System integrity depends upon extrinsic incentives:
both the block-chaining reward and its offsetting transaction fee need
arbitrary adjustment, which again involves an economic decision, thus
creating a political problem.