It’s a matter of degree.
Bitcoin’s mining process requires one to spend money to make money (initial cost of hardware, plus ongoing cost of electricity = reward in bitcoin).
[ul][li]Mining equipment has constantly been improving, and the number of people mining (and thus total hashrate) has been increasing (see https://blockchain.info/charts/hash-rate?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=).[/li]
[li]This means that with every increase in difficulty OR drop in price, EITHER individual miners make less money or an individual miner stops mining.[/li]
[li]The equipment that does the mining is physical, distinct from the network. This means when a miner stops mining, he still maintains control of that hashpower, it’s just not “on”.[/li]
[li]Additionally, mining cost (both the physical hardware and electricity) is in fiat (such as USD $), not bitcoin.[/li]
[li]This means for small fluctuations in price or difficulty, bitcoin can easily bounce back to equilibrium.[/li]
[li]For large fluctuations in price or difficulty, a consortium of miners (or a single large miner) who had to stop mining because of the downward price swing still have their physical equipment. Their hardware is unprofitable to use to mine. However, they can use their hardware and spend fiat ($) to ATTACK the network to make a profit.[/li]
[li]While their attack would negatively impact the network, it doesn’t affect the evil miner, who only holds fiat (and converts all bitcoins to fiat immediately).[/li]
[li]One may argue that a single miner would never be strong enough to pull off such an attack. However, strength is hidden in this attack until an attack happens. Imagine a evil miner controls 20% of hashpower at day 0. On day 1, Bitcoin drops 80% of value, and to reach equilibrium 80% of hashpower is turned off to keep mining profitable (including all of the evil miner’s hashpower). Bitcoin is now secured by only 20% of the original hashpower it had on day 0. If the evil miner turned all his mining equipment back on to attack the network, he’d have 50% of the current hashpower immediately.[/li]
[li]I don’t expect the attack to happen as I outlined above. Rather, I wish to just point out the property of bitcoin that it’s security is not exactly equal to its hashpower. If it had 50 hashpower, then grows to 100 hashpower, then falls back down to 50 hashpower - it’s not equally as secure as it was in the beginning at 50 hashpower - because now enough hashpower exists on the market for 100 hashpower, but only 50 of it is turned on.[/li][/ul]
Peercoin’s minting process is not linked to spending fiat to make peercoin (assume minter’s already have a PC/laptop).
[ul][li]Minting hardware is whatever you already have available (or a raspberry pi), and thus doesn’t factor into the equation.[/li]
[li]Rather than consuming electricity (which costs fiat) as PoW, Peercoin’s PoS consumes coindays (which requires holding peercoin).[/li]
[li]As such, there is no significant inherent cost to minting other than holding peercoin - and thus no reason to turn it off, unless Peercoin hits 0 value.[/li]
[li]To either secure the network or attack the network, bitcoin requires having special hardware and spending fiat on electricty. Peercoin requires no special hardware, and spending coindays and thus holding peercoin. This means attacks from a bitcoin miner can generate a profit as they don’t affect his expenditure (hardware/energy cost), while attacks from a peercoin minter actually destablize the value of the very coins he is holding to mint![/li]
[li]A large fluctation in value thus doesn’t really affect peercoin’s strength, other than potentially causing users to lose interest in peercoin and stop minting - but that property is common to any distributed consensus protocol, and is negligible.[/li][/ul]
Bitcoin security is related to its market value, and a drop in market value reduces its security to less than when it previously held that same market value. Peercoin’s security is unrelated to its market value, unless its market value hits 0.