Difference between Peercoin and Primecoin

Key Difference: Both Peercoin and Primecoin are developed by pseudonymous developer named Sunny King. Both are inspired by Bitcoin, and share much of its source code and technical implementation. The main difference is that Peercoin implements a combined proof-of-stake and proof-of-work system, whereas Primecoin implements a scientific computing proof-of-work system.

Both Peercoin and Primecoin are different types of cyptocurrencies. Cryptocurrencies are a type of digital currencies that use cryptography to implement a distributed, decentralized and secure information economy. This essentially means that it is traded online, but does not have a centralized authority, such as banks or governments controlling or limiting it. However, this also means that it is not backed by an authority in case of fallout. The currency has value just because regular people have deemed that it does and there is demand for the currency.

While, the concept of cyptocurrencies is not new and dated back to the 1980s; this recent trend was started by Bitcoin, which came onto the scene in 2009. Since then, various other cyptocurrencies have crept up that aimed to duplicate or build up on the Bitcoin protocol. Peercoin was one such currency. It was launched on 12 August 2012 by a pseudonymous developer named Sunny King.

Peercoin was inspired by Bitcoin, and shares much of its source code and technical implementation. However, it differs in one main aspect. Bitcoin works on a proof-of-work system, which allows the mining of bitcoins by solving its block chain, whereas Peercoin implements a combined proof-of-stake and proof-of-work system. It is in fact the first cryptocurrency to implement this.

The proof-of-stake method of generating coins requires very minimal energy consumption as it only requires the energy to run the client software on a computer, as opposed to running resource-intensive cryptographic hashing functions as required by Bitcoin. Still, since its launch Peercoin's primary method of coin generation is the proof-of-work hashing mining. Over time the proof-of-work will be phased out as proof-of-work difficulty increases and block rewards decrease; it will then be replaced by proof-of-stake. As of January 2014, roughly 90% of new coins being generated are still from proof-of-work and the energy consumption of Peercoin uses roughly 30% of the energy consumption of Bitcoin.

Furthermore, unlike Bitcoin, Peercoin will face a steady 1% "decentralized" inflation per year. Peercoin also charges a fixed rate of 0.01 PPC for every transaction. This fee is not added to the miner, but is instead destroyed in order to offset the inflation caused by the minting process.

Sunny King, the pseudonymous developer of Peercoin, later went on to develop another cyptocurrency named Primecoin. Like Peercoin, Primecoin is also inspired by Bitcoin, and shares much of its source code and technical implementation. However, unlike the two, Primecoin implements a scientific computing proof-of-work system. This system introduces a unique form of proof-of-work based on prime numbers.

Peercoin’s proof-of-work system is based on the SHA-256 secure hash algorithm, which will be eventually replaced by proof-of-stake. The proof-of-work system aims to just solve the block chain, whereas Primecoin’s proof-of-work system uses the finding of long Cunningham chains, which can lead to useful byproducts. In addition to providing security and minting to the network, the system also generates a special form of prime number chains of interest to mathematical research. Furthermore, Peercoin releases a block every 10 minutes, whereas Primecoin releases a block every minute. Hence, Primecoin processes payment transactions 10x faster than Peercoin.

Additionally, Primecoin can still be mined using standard servers, as opposed to the customized ASIC boxes now required to successfully mine other currencies. In recent weeks, it has become more difficult to profitably mine Primecoins, which is prompting some miners to add more computing capacity to try and keep pace, which is leading to a shortage of servers.

Comparison between Peercoin and Primecoin:

 

Peercoin

Primecoin

Definition

The first cryptocurrency based on an implementation of a combined proof-of-stake (PoS) and proof-of-work system (PoW).

A cryptocurrency that implements a scientific computing proof-of-work system.

Type of

Digital Cryptocurrency

Digital Cryptocurrency

Launched

12 August 2012

7 July 2013

Developed by

Sunny King

Sunny King

Symbol

Ψ

Unit

PPC, P2PCoin or PPCoin

XPM

Subunit

0.001 = mPPC (millicoin)

0.000001 = μPPC (microcoin)

0.00000001 = Smallest unit

0.001 = mXPM (millicoin)

0.000001 = μXPM (microcoin)

0.00000001 = Smallest unit

Value (on February 6, 2014)

1 Peercoin = $ 5.14

1 Primecoin = $ 2.82

Scope

Combined proof-of-stake and proof-of-work system.

Scientific computing proof-of-work system.

Market capital (on February 6, 2014)

$ 108,445,624

$ 12,172,899

Mined Coins (on February 6, 2014)

21,116,727 PPC

4,315,967 XPM

Users

International

International

Inflation

Limited release rate plus 1% decentralized inflation due to the proof-of-stake system.

The number of Primecoins released per block is not fixed but is always equal to 999 divided by the square of the difficulty.

Final Total

No limit

No limit

Method

Difficulty linked to the number of people mining

Difficulty slightly adjusted every block.

Algorithm

SHA-256

1CC/2CC/TWN

Mined using

GPUs, FPGA, or ASIC

Cannot be mined using GPUs.

Image Courtesy: brandsoftheworld.com, coinpursuit.com

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