What is Peercoin?

Peercoin was activated in 2012, making it one of the earliest cryptocurrencies. It introduced proof-of-stake consensus and shares fundamental technical features with Bitcoin, including the use of the SHA-256 cryptographic hash function. Unlike other cryptocurrencies, Peercoin does not implement a hard cap on supply but aims for an annual inflation rate of 1%. A portion of transaction fees is destroyed, introducing a deflationary aspect to the economy. The system is designed for energy efficiency and scalability, though it faced competition from other cryptocurrencies that offered faster transaction speeds and additional features.

The Peercoin development team emphasizes preserving decentralization and security by treating the blockchain as a base layer for value settlement. They advocate for the development of second-layer protocols and sub-networks that function on top of the Peercoin blockchain. This strategy is intended to enhance functionality, enabling features such as tokens, smart contracts, and efficient transaction processing while maintaining a secure and censorship-resistant infrastructure.