I wonder whether PPCoin is useful. I have not been able to find a complete answer by myself, so I hope that other people also have an opinion and we can discuss here.
In general, I think an altcoin is not useful unless it is an improvement over Bitcoin. (Being just an alternative for Bitcoin is not useful, but being better than Bitcoin can be useful). So what are the big problems in Bitcoin and how does PPCoin solve those?
(1) Bitcoin mining burns a huge amount of energy and this will only get worse. To keep Bitcoin secure, the network hash rate must always be much higher than the hash rate that any adversary can put together.
PPCoin solves this problem via proof-of-stake mining. However this will only help if PPCoin completely replaces Bitcoin. If both networks continue to exist, Bitcoin will still waste the same amount of energy and nothing is saved.
(2) It may be difficult to attract enough miners once the block reward becomes very low. This may cause Bitcoin to become insecure in the future.
PPCoin probably solves this problem via proof-of-stake mining.
(3) Too many transactions. The Bitcoin blockchain will not be able to handle the number of transactions produced by a world-wide micropayment system.
PPCoin avoids this problem in a way that limits its own usefulnes. The fixed transaction fee of PPCoin provides a natural limit to the number of transactions. However, it also makes PPCoin infeasible as a world-wide micropayment system: when the value of PPCoin reaches 100 USD, transactions will be so expensive that nobody wants to use them for micropayments. In effect PPCoin is even less scalable than Bitcoin.
(4) Bitcoin provides only weak anonimity.
PPCoin does not change anything here.
PPCoin also has a problem of its own:
(5) Because miners do not receive transaction fees, there is no reason for them to process transactions at all. The miners can avoid all that trouble by mining only empty blocks.
Conclusion: Two out of four problems solved and one new problem created.
It certainly looks like PPCoin is onto something, but is it enough?