I should have this up within the next 4 hours.
@peerchemist @RobertLloyd @Nagalim @Chronos
Length
As you will probably notice, this is much longer than the previous scripts we’ve worked on. The last video on Peercoin’s economics was 5:37 minutes long. My own reading of this final script took, about 2 and a half minutes longer, so overall it’s about 8:00 minutes in length.
Since this is the last video in the series, I feel more comfortable about letting the time run over. If someone has watched all the videos in the series so far, they will most likely finish this off too even if it’s a little bit more lengthy.
This is one of the most complicated subjects in the blockchain industry, so I wanted to make sure we take the time to sufficiently explain it. I’m afraid that if we cut out significant portions of the text in order to shorten it, we will lose important messaging that is required for the viewer’s understanding of the subject. Maybe there are some non-vital edits we can make, but please let’s go into this with the goal of retaining important understandings, even if the same information may be repeated a number of times to reinforce it for the viewer.
Paragraph Summaries
Below I will post a quick summary for each paragraph, to show how I lead the viewer through the information.
1. Intro to part 5.
2. Introducing the subject of part 5, the role of the Peercoin blockchain.
3. Sunny’s quote about Peercoin as a backbone currency.
4. Translation of backbone currency to settlement layer and some brief info about one of the major qualities of a settlement layer.
5. Early expectations about what the Bitcoin blockchain was capable of, versus the reality of its limited transaction capacity.
6. Refocusing the role of the blockchain from day to day payments to settlement layer with a high level of decentralization, and introducing layer 2 as a solution to scaling.
7. Explaining how layer 2 scales transaction capacity, and asking the question why this multilayered system depends on the blockchain as its base.
8. Explain that blockchain records information/data in an unalterable state.
9. Briefly explain how security validators protect the blockchain and its ledger from fraudulent transactions, without going into complex ideas like hashing.
10. Explain how a blockchain that can record data, but not alter it leads to a state of trustless security and that this is why the blockchain is used as the base layer.
11. Explain that layer 2 creates expanded functionality/utility and why the blockchain’s immutability is required for layer 2 to properly function.
12. Real life examples of layer 2, Lightning, PeerAssets, Perpera.
13. Start tying all this back into Peercoin, that it was designed from its inception to become this foundational layer, unlike Bitcoin, which had to change strategy.
14. Recap all of Peercoin’s major design choices covered in previous videos that lead it to being seen as the perfect settlement layer.
15. Concluding paragraph about how Peercoin is a better settlement layer because its block producers are not in competition with layer 2 node operators for transaction fees, how Peercoin and layer 2 are completely aligned.
16. Concluding remarks.
As you can see, each paragraph has a specific purpose, revealing information piece by piece until it gets tied up in the end by offering Peercoin up as the perfect settlement layer. If any piece is removed from this path, I fear it would negatively impact the understanding of the subject that viewers parts with. But let’s see what you guys think first.
With Formatting
Hi, I’m Chronos, and welcome to Part 5 of the Peercoin Primer. Peercoin is one of the world’s most established cryptocurrencies, and each video in this series will explore a different aspect of it.
Show overview onscreen:
Part 1: Launch
Part 2: Security
Part 3: Benefits
Part 4: Economics
Part 5: Mission
In this video, we’re going to talk about Peercoin’s mission. and particularly In particular, we will focus on the role of the Peercoin blockchain itself. Sunny King, the anonymous founder of Peercoin, said the following about this in a 2013 interview: (pause)
“From my point of view, I think the cryptocurrency movement needs at least one ‘backbone’ currency, that maintains a high degree of decentralization, maintains a high level of security, but doesn’t necessarily provide a high volume of transactions.” (pause)
When Sunny talked about Peercoin as a backbone currency, he was actually introducing a concept that has since become known in the broader crypto community as a settlement network layer. Before we delve further into this, we must first understand why decentralized blockchains are weak on scalability. As stated by Sunny in this interview, a settlement layer like Peercoin is a blockchain which places a high priority on maintaining its decentralized security and a low priority on supporting high volumes of transactions, however there is more to understanding what a settlement layer is and what it does.
In the early days of cryptocurrency, it was believed by many that the Bitcoin blockchain alone could compete with other payment processing networks such as Visa or Mastercard, and even act as a complete replacement for paper money. However, in reality it turns out that decentralized blockchains struggle to support high transaction volumes, and attempting to do so actually runs the risk of centralizing a blockchain’s security over time. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale by the general population.
Specifically, it is difficult for a blockchain to remain decentralized while supporting an ever increasing number of users, transactions and functions. This is because additional strain is placed on the block producers who are processing these transactions. Many block producers are not equipped to handle the additional transaction load, resulting in a shrinking number of block producers and the eventual centralization of the blockchain itself.
Many blockchain projects have therefore had to transfer the scaling of transactions on the blockchain to scaling of transactions off the blockchain through the use of
A more viable path toward supporting mass usage of cryptocurrency is by refocusing the role of the blockchain away from day to day payment processing and toward the role of settlement layer, focusing instead on maximizing the level of decentralization within a blockchain, while also utilizing separate technologies like layered scaling solutions that can indirectly increase the transaction capacity of blockchains. Layered scaling means the majority of transactions are
With layered scaling, rather than transactions taking place directly on the blockchain, they are instead conducted off the blockchain through separate, independent layers built specifically for high large volumes or and high speed, low cost transactions transaction processing. This takes helps prevent congestion on pressure off the main blockchain by allowing microtransactions to be offloaded and processed instead on these secondary layer networks. In this model, the blockchain is treated as the foundational layer in a multilayered network. Why is this dependency on the blockchain necessary though? (pause)
Note: A large section below has been completely replaced.
At its essence, a blockchain is a public ledger where digital information is recorded and stored in a manner that prevents it from being easily edited or altered in the future, even by wealthy individuals or powerful government entities. This immutability means data recorded on the ledger cannot be tampered with or changed. As a result, the data becomes permanently locked into the blockchain forever.
The permanence of this data is made possible by the public and transparent nature of the blockchain’s ledger and the ability of a large and globally decentralized group of security validators to verify the ledger’s accuracy. Each validator holds a full copy of the ledger and consistently scans for fraudulent activity by malicious users. If anything is detected, the changes are rejected by these validators. In this way, the blockchain automatically shields itself from external threats that try tampering with the data recorded on the ledger.
As the base of this multilayered network, the primary role of the blockchain is to provide a way for digital information to be recorded and distributed without the ability to alter it. This leads to a state of trustless security, where all users of the network can depend on the blockchain and its ability to automatically guarantee the accuracy and security of recorded data, as opposed to placing trust in any one individual to provide the same service. This trustless security is the core value proposition of the blockchain, and the reason why it is utilized as the base layer of the network.
Any independent layers built above the blockchain are designed to take advantage of the permanence of the data stored on the chain. These separate layer 2 networks create additional expanded functionality that the blockchain is incapable of achieving by itself. Together, they form an important symbiosis. The blockchain records and stores information in a permanent manner, while layer 2 expands utility by creating new ways of interacting with that information. Without an immutable blockchain as the base of the system, layer 2 would be worthless as it would be much easier to tamper with the underlying stored data. Therefore, layer 2 is only as strong as its foundation. Equally, without layer 2, the blockchain would be less useful, as data would be stored with fewer ways of interacting with it.
A good real life example of layer 2 in action is the Lightning Network, which was developed in order to help scale the Bitcoin blockchain. As previously discussed with layered scaling, microtransactions can be offloaded and processed through Lightning, while the blockchain is only occasionally utilized to record final settlement, hence the name settlement layer. Other layer 2 examples include PeerAssets, a blockchain agnostic token protocol, and Perpera, a document audit protocol, both developed in-house by the Peercoin Team.
Note: Robert, I brought back some of your paragraphs here in the closing remarks to tie everything back to Peercoin.
As Sunny King intended in 2012, the mission of the Peercoin blockchain blockchain’s mission was to be become this foundation trustless settlement layer, now known as a “settlement layer” This which shows incredible forethought by Sunny King, as Bitcoin did not adopt this strategy until years later after it became obvious the blockchain alone could not support mass global usage of a transactional cryptocurrency. transactions on a mass scale. Not only does layer 2 help solve transaction scaling issues, it also gives birth to a broader ecosystem of new utility with the blockchain as its foundation.
This means that, From the outset, all of Peercoin’s design choices were made with the objective of becoming the perfect have been geared towards being a foundational settlement layer. upon which second layers can be built. We’ve discussed these design choices in videos 1 to 4; to recap, they include: removing the conflict of interests between miners and coin holders, by ** allowing** coin holders to mint their own blocks doing their own minting; achieving an efficient and inexpensive security protocol based on scarcity of time, rather than electricity; attaining geographical decentralization of minting power; allowing for 1% annual inflation to prevent deflation; and removing transaction fees as a means of paying compensating block producers, replacing them instead with a continuous block reward that will never end.
Further, Peercoin’s these design choices mean that it Peercoin actually acts better as a settlement layer than Bitcoin. For example, Given that Peercoin’s security is maintained through a continuous block reward, which means there can never be competition between Peercoin’s block producers and 2nd layer 2 node operators for transaction fees. This makes Peercoin more compatible with second layer 2 scaling infrastructure networks than blockchains like Bitcoin that rely on security through transaction fees, since it eliminates the conflict of interests inherent in when both the settlement layer and the 2nd layer node operators chasing chase the same users for fees. In conclusion, Peercoin can sustain its own security without competing for transaction fees with 2nd layer node operators, ensuring that all layer 2 infrastructure is perfectly aligned with Peercoin as its trustless foundation.
If you enjoyed these videos, and want to learn more about Peercoin, be sure to head over to the official website at peercoin.net. There’s also a great community, very knowledgeable and friendly, on the official forums at talk.peercoin.net. And lastly, there’s a ton more educational material in the Peercoin University, at university.peercoin.net, where you can really get in-depth with this beautiful blockchain.
If you have any questions or comments, let us know! Post below the video, or just head over to the forums. We’d love to hear from you.
Oh, and don’t forget to subscribe. 
I’m Chronos. Thanks for watching!
Without Formatting
Hi, I’m Chronos, and welcome to Part 5 of the Peercoin Primer. Peercoin is one of the world’s most established cryptocurrencies, and each video in this series will explore a different aspect of it.
Show overview onscreen:
Part 1: Launch
Part 2: Security
Part 3: Benefits
Part 4: Economics
Part 5: Mission
In this video, we’re going to talk about Peercoin’s mission. In particular, we will focus on the role of the Peercoin blockchain itself. Sunny King, the anonymous founder of Peercoin, said the following about this in a 2013 interview: (pause)
“From my point of view, I think the cryptocurrency movement needs at least one ‘backbone’ currency, that maintains a high degree of decentralization, maintains a high level of security, but doesn’t necessarily provide a high volume of transactions.” (pause)
When Sunny talked about Peercoin as a backbone currency, he was actually introducing a concept that has since become known in the broader crypto community as a settlement layer. As stated by Sunny in this interview, a settlement layer like Peercoin is a blockchain which places a high priority on maintaining its decentralized security and a low priority on supporting high volumes of transactions, however there is more to understanding what a settlement layer is and what it does.
In the early days of cryptocurrency, it was believed by many that the Bitcoin blockchain alone could compete with other payment processing networks such as Visa or Mastercard, and even act as a complete replacement for paper money. However, in reality it turns out that decentralized blockchains struggle to support high transaction volumes, and attempting to do so actually runs the risk of centralizing a blockchain’s security over time. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale by the general population.
A more viable path toward supporting mass usage of cryptocurrency is by refocusing the role of the blockchain away from day to day payment processing and toward the role of settlement layer, focusing instead on maximizing the level of decentralization within a blockchain, while also utilizing separate technologies like layered scaling that can indirectly increase the transaction capacity of blockchains.
With layered scaling, rather than transactions taking place directly on the blockchain, they are instead conducted off the blockchain through separate, independent layers built specifically for large volumes and high speed, low cost transaction processing. This helps prevent congestion on the main blockchain by allowing microtransactions to be offloaded and processed instead on these secondary layer networks. In this model, the blockchain is treated as the foundational layer in a multilayered network. Why is this dependency on the blockchain necessary though? (pause)
At its essence, a blockchain is a public ledger where digital information is recorded and stored in a manner that prevents it from being easily edited or altered in the future, even by wealthy individuals or powerful government entities. This immutability means data recorded on the ledger cannot be tampered with or changed. As a result, the data becomes permanently locked into the blockchain forever.
The permanence of this data is made possible by the public and transparent nature of the blockchain’s ledger and the ability of a large and globally decentralized group of security validators to verify the ledger’s accuracy. Each validator holds a full copy of the ledger and consistently scans for fraudulent activity by malicious users. If anything is detected, the changes are rejected by these validators. In this way, the blockchain automatically shields itself from external threats that try tampering with the data recorded on the ledger.
As the base of this multilayered network, the primary role of the blockchain is to provide a way for digital information to be recorded and distributed without the ability to alter it. This leads to a state of trustless security, where all users of the network can depend on the blockchain and its ability to automatically guarantee the accuracy and security of recorded data, as opposed to placing trust in any one individual to provide the same service. This trustless security is the core value proposition of the blockchain, and the reason why it is utilized as the base layer of the network.
Any independent layers built above the blockchain are designed to take advantage of the permanence of the data stored on the chain. These separate layer 2 networks create additional expanded functionality that the blockchain is incapable of achieving by itself. Together, they form an important symbiosis. The blockchain records and stores information in a permanent manner, while layer 2 expands utility by creating new ways of interacting with that information. Without an immutable blockchain as the base of the system, layer 2 would be worthless as it would be much easier to tamper with the underlying stored data. Therefore, layer 2 is only as strong as its foundation. Equally, without layer 2, the blockchain would be less useful, as data would be stored with fewer ways of interacting with it.
A good real life example of layer 2 in action is the Lightning Network, which was developed in order to help scale the Bitcoin blockchain. As previously discussed with layered scaling, microtransactions can be offloaded and processed through Lightning, while the blockchain is only occasionally utilized to record final settlement, hence the name settlement layer. Other layer 2 examples include PeerAssets, a blockchain agnostic token protocol, and Perpera, a document audit protocol, both developed in-house by the Peercoin Team.
As Sunny King intended in 2012, the Peercoin blockchain’s mission was to become this trustless settlement layer, which shows incredible forethought by Sunny King, as Bitcoin did not adopt this strategy until years later after it became obvious the blockchain alone could not support transactions on a mass scale. Not only does layer 2 help solve transaction scaling issues, it also gives birth to a broader ecosystem of new utility with the blockchain as its foundation.
From the outset, all of Peercoin’s design choices were made with the objective of becoming the perfect settlement layer. We’ve discussed these design choices in videos 1 to 4; to recap, they include: removing the conflict of interests between miners and coin holders by allowing coin holders to mint their own blocks; achieving an efficient and inexpensive security protocol based on scarcity of time, rather than electricity; attaining geographical decentralization of minting power; allowing for 1% annual inflation to prevent deflation; and removing transaction fees as a means of compensating block producers, replacing them instead with a continuous block reward that will never end.
Further, these design choices mean that Peercoin actually acts better as a settlement layer than Bitcoin. Given that Peercoin’s security is maintained through a continuous block reward, there can never be competition between Peercoin’s block producers and layer 2 node operators for transaction fees. This makes Peercoin more compatible with layer 2 networks than blockchains like Bitcoin that rely on security through transaction fees, since it eliminates the conflict of interests inherent when both the settlement layer and 2nd layer node operators chase the same users for fees. In conclusion, Peercoin can sustain its own security without competing for transaction fees with 2nd layer node operators, ensuring that all layer 2 infrastructure is perfectly aligned with Peercoin as its trustless foundation.
If you enjoyed these videos, and want to learn more about Peercoin, be sure to head over to the official website at peercoin.net. There’s also a great community, very knowledgeable and friendly, on the official forums at talk.peercoin.net. And lastly, there’s a ton more educational material in the Peercoin University, at university.peercoin.net, where you can really get in-depth with this beautiful blockchain.
If you have any questions or comments, let us know! Post below the video, or just head over to the forums. We’d love to hear from you.
Oh, and don’t forget to subscribe. I’m Chronos. Thanks for watching!
Here are some comments from Peerchemist…
Thanks, Sentinel
I’ll post some comments in due course …
1 Like
Excellent. After you guys are happy with the final version, I’ll make a pass through to tighten some language and make any small corrections, as with previous scripts. Good work so far!
Generally, it’s good, and this video is very important. I like the meat of it, I worry that the beginning is redundant with previous videos, and the ending could be opened up more broadly to situate Peercoin conclusively amongst the sands of time as an important step forward for the entire human race. This video could really shine as a capstone for explaining our efforts to a wide audience.
I think you should remove this. It is a rhetorical writing method that I am not keen on, and does not significantly change the flow of the video.
could replace this with just ‘external tampering’.
I wonder if we can give them a name rather than just the generic ‘layer 2’. Base layer or settlement layer for ‘layer 1’ is good, though you might want to try to be more consistent about which one you use. Maybe ‘Abstraction layer’? Calling it ‘layer 2’ over and over seems weird to me.
I would prefer we feature Perpera over Lightning network, for political reasons. This is at odds with what @peerchemist believes for this paragraph, so we will have to discuss it some.
This is a long run on.
‘a robust settlement layer’ instead of ‘perfect’?
A graphic might work well here when listing out the 5 design choices.
I don’t like that this is stressed, you could remove the ‘never end’ bit and it would be just fine ending on ‘continuous block reward’.
I’m not sure we should end the final video with another Bitcoin comparison statement. It might be better to go for the kill by comparing it in some way to other systems of record keeping around the world. This whole paragraph could be replaced with a more generally applicable statement on why the whole world needs Peercoin, and not just the cryptoverse.
1 Like
Some suggested edits below.
I agree with what Nagalim says about the changing terms for layer 2: we have layered scaling, independent layers, separate layer 2 networks, multilayered network, etc. How about “secondary layers”?
+++
Hi, I’m Chronos, and welcome to Part 5 of the Peercoin Primer. Peercoin is one of the world’s most established cryptocurrencies, and each video in this series will explore a different aspect of it.
Show overview onscreen:
Part 1: Launch
Part 2: Security
Part 3: Benefits
Part 4: Economics
Part 5: Mission
In this video, we’re going to talk about Peercoin’s mission. In particular, we will focus on the role of the Peercoin blockchain itself. Sunny King, the anonymous founder of Peercoin, said the following about this in a 2013 interview : (pause)
“From my point of view, I think the cryptocurrency movement needs at least one ‘backbone’ currency, that maintains a high degree of decentralization, maintains a high level of security, but doesn’t necessarily provide a high volume of transactions.” (pause)
When Sunny talked about Peercoin as a backbone currency, he was actually introducing a concept that has since become known in the broader crypto community as a settlement layer. As stated by Sunny in this interview, a settlement layer like Peercoin is a blockchain which places a high priority on maintaining its decentralized security and a low priority on supporting high volumes of transactions, however there is more to understanding what a settlement layer is and what it does .
In the early days of cryptocurrency, it was believed by many that the Bitcoin blockchain alone could would compete with other payment processing networks such as Visa or Mastercard, and even act as a complete replacement for paper money. However, in reality it turns turned out that decentralized blockchains struggle to support high transaction volumes, and attempting to do so actually runs the risk of centralizing a blockchain’s security over time. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale by the general population.
A more viable path toward supporting mass usage use of cryptocurrency is by refocusing the role of the blockchain away from day to day payment processing and toward the role of settlement layer, focusing instead on thus permitting the maximum the level of decentralization within a the blockchain, while also utilizing separate technologies like layered scaling that can indirectly to increase the transaction capacity of blockchains.
With layered scaling, rather than transactions taking place directly on the blockchain, they are instead conducted off the blockchain through separate, independent layers built specifically for large volume and high speed low cost transaction processing. This helps prevents congestion on the main blockchain by allowing microtransactions to be offloaded and processed instead on onto these secondary layer networks. In this way model , the blockchain is treated as the settlement and foundational layer in a multilayered network. Why is this dependency on the blockchain necessary though? (pause)
At its essence, a blockchain is a public ledger where digital information is recorded and stored in a manner that prevents it from being easily edited or altered in the future , even by wealthy individuals or powerful government entities . This immutability means data recorded on the ledger cannot be tampered with or changed. As a result, the data becomes permanently locked into the blockchain forever .
I don’t see a need for the next paragraph, as it concerns the internal workings of the blockchain, rather than PPC’s relevance to it.
[suggest remove] The permanence of this data is made possible by the public and transparent nature of the blockchain’s ledger and the ability of a large and globally decentralized group of security validators to verify the ledger’s accuracy. Each validator holds a full copy of the ledger and consistently scans for fraudulent activity by malicious users. If anything is detected, the changes are rejected by these validators. In this way, the blockchain automatically shields itself from external threats that try tampering with the data recorded on the ledger.
As the base of this a multilayered network, the primary role of the blockchain is to provide’s a way for digital information to be recorded and distributed without the ability to alter it. This leads to a state of trustless security, where all users of the network can depend on the blockchain’s and its ability to automatically guarantee the accuracy and security of recorded data, as opposed to placing trust in any one individual to provide the same service . This trustless transparency and security is the core value proposition of the blockchain, and the reason why it is utilized as the base layer of the network.
Any independent layers built above on the blockchain are designed to take advantage of the permanence of the data stored on the chain. These separate layer 2 networks create undertake additional expanded functionality functions that the blockchain is incapable of achieving by itself. Together, they form an important symbiosis relationship . The blockchain records and stores information in a permanent manner, while layer 2 expands utility by creating new ways of interacting with that information. Without an immutable blockchain as the base of the system, layer 2 would be worthless compromised as it would be much easier to tamper with the underlying stored data . Therefore, layer 2 is only as strong as its foundation. Equally, without layer 2, the blockchain would be less useful, as data would be stored with fewer ways of interacting with it.
An good real life example of layer 2 in action is the Lightning Network, which was developed in order to help scale the Bitcoin blockchain. As previously discussed with layered scaling , Microtransactions can be offloaded and processed through Lightning, while the blockchain is only occasionally utilized to record final settlement, hence the name settlement layer. Other layer 2 examples include PeerAssets, a blockchain agnostic token protocol, and Perpera, a document audit protocol, both developed in-house by the Peercoin Team.
As Sunny King intended in 2012, the Peercoin blockchain’s mission was to become this trustless settlement layer, which shows incredible forethought by Sunny King, as Bitcoin did not adopt this strategy until years later after it became obvious the blockchain alone could not support transactions on a mass scale. Not only does layer 2 help solve transaction scaling issues, it also gives birth to a broader ecosystem of new utility with the blockchain as its foundation.
From the outset, all of Peercoin’s design choices were made with the this objective of becoming a the perfect settlement layer. We’ve discussed these design choices in videos 1 to 4; to recap, they include: removing the conflict of interests between miners and coin holders by allowing coin holders to mint their own blocks; achieving an efficient and inexpensive security protocol based on scarcity of time, rather than electricity; attaining geographical decentralization of minting power; allowing for 1% annual inflation to prevent deflation; and removing transaction fees as a means of compensating block producers, replacing them instead with a continuous block reward that will never end.
Note: I wonder if we should do more to emphasise the one per cent inflation aspect, as that is at the heart of the sustainability strategy.
Further, these design choices mean that Peercoin actually acts better as a settlement layer than Bitcoin. Given that Peercoin’s security is maintained through a continuous block reward, there can never be competition between Peercoin’s block producers and layer 2 node operators for transaction fees, This makes Peercoin more compatible with layer 2 networks than blockchains like Bitcoin that rely on security through transaction fees , since it eliminates the conflict of interests inherent when both the settlement layer and 2nd layer node operators chase the same users for fees. In conclusion, Peercoin can sustain its own security without competing for transaction fees with 2nd layer node operators, ensuring that all layer 2 infrastructure is perfectly aligned with Peercoin as its trustless foundation.
If you enjoyed these videos, and want to learn more about Peercoin, be sure to head over to the official website at peercoin.net. There’s also a great community, very knowledgeable and friendly, on the official forums at talk.peercoin.net. And lastly, there’s a ton more educational material in the Peercoin University, at university.peercoin.net, where you can really get in-depth with this beautiful blockchain.
If you have any questions or comments, let us know! Post below the video, or just head over to the forums. We’d love to hear from you.
Oh, and don’t forget to subscribe. I’m Chronos. Thanks for watching!
Thanks, I’ll take a look at these in about 8 hours.
Robert, what is your reason for wanting to discard this sentence? I added this in because I wanted to make it clear what a settlement layer is. First we translate the name backbone currency to settlement layer for the viewer, but then we drop it until a couple paragraphs later when talking about a more viable path. So if you are going to drop this sentence, you have to assume that the viewer will have understood the idea behind a settlement layer based only on a quick first reading of Sunny’s quote. I don’t think that will be the case, so first I translate the term to what is used today, and then I do a little further translating of Sunny’s quote, saying that a settlement layer gives higher priority to decentralization and lower priority to transactions. That sets up for the next paragraph where I talk about the opposite, how Bitcoin originally gave higher priority to transactions at the expense of decentralization and how this role needed to be switched
I understand this paragraph is not completely necessary, since I already explained the blockchain is tamper proof in the previous paragraph. The reason why I did include it is so the viewer can gain a better understanding of why the blockchain is tamper proof. Without it, we are expecting the viewer to blindly believe our claims about blockchain (that it’s tamper proof) without at least giving them some quick explanation about how this can be true. I think it also helps with the viewer’s understanding of why the blockchain is necessary for layer 2 to work properly.
I’m not aware of any other name the crypto community has given for layer 2. My understanding is layer 2 is the most widely used term. Please correct me if I’m wrong, but I felt it best to use the term which is being used the most by people in the industry to avoid confusion.
This is something you would need to talk about with @peerchemist. I have to add that the entire text is built to lead up to Lightning as the primary example of layer 2. This is the reason why I explained layered scaling earlier in the text. Once I get through explaining what layer 2 is, then I introduce Lightning as an example of something we already learned.
I don’t think we should remove the information about how a continuous block reward prevents interference with layer 2 node operators. That is a very important feature. But I do agree that there could be a better conclusion, maybe after this paragraph. It sounds like you might have something specific in mind?
I agree that we should not talk much about LN for political reasons. I always say “LN and similar solutions”, hinting that LN is not the only way to handle second layer.
Sure, I can adapt the paragraph to stress this, so nobody thinks we are siding with Lightning as the best solution.
I also provided other examples of layer 2 that we built (PeerAssets and Perpera). They act more as names that can be searched later after viewing the video. Are you sure you want them to be removed?
Yes.
Hi, Sentinel
The reason why I suggested removing the para after Sunny’s quote is partly because I felt it was too similar to what he was saying - but also because, without that section, the script moves on in a natural way and explains the settlement layer further down - I think trying to “pre-empt” this with an earlier mini-explanation is unnecessary and acts as a delay.
The reason why I suggest removing the paragraph explaining blockchain immutability is partly to “re-weight” the script away from general (non-PPC) matters and towards PPC - but also, to my mind, it is more a case of reminding the viewer the block chain is that immutable, and assert it as a fact, rather than explaining the details of why. The big Why of the video should be: why PPC is the best choice for that blockchain.
I agree with Peerchemist’s view that references to PeerAssets and Perpera should be removed.
Hey guys, I don’t know your schedules, but if possible I’d like to try hashing the rest of this out over the weekend.
I don’t think that is feasible. I’m out today, and we’re still at draft one.
I just want to say that I’d like to keep that quote from SK at the opening.
@Sentinelrv can you post properly formatted script again, perhaps with some edits from @RobertLloyd adopted so I can read it again.
Yes, I’ll do it later today.
Layer 2 and lighting are not synonymous. You lead up to layer 2 applications, not necessarily lightning. Lightning is an example, but you could also talk about atomic swaps or generically mention smart contract protocols (if PC is so against mentioning peerassets). You can show that there is more to layer 2 than lightning.
For the last paragraph, the specific I had in mind is the general. State that Peercoin is revolutionizing record keeping globally, and completely overhauling human understanding of what possession is. It is redefining economics away from central authorities and placing it in the hands of math rather than politics. Peercoin is a broad reaching movement, not just another bitcoin clone.
You can use synonyms for ‘layer 2’ instead of saying it over and over. ‘Scaling solutions’ or ‘off-chain’ for example.
I’m still working through this. I hope to be able to post an updated version in the next hour or two.
- I incorporated many of the suggestions so far.
- We still need a concluding paragraph.
- I removed the term “layered scaling” and just replaced it with secondary layers. I also tried using this term in a couple more places before ultimately switching to the “layer 2 networks” or the shorter “layer 2.”
With Formatting
Hi, I’m Chronos, and welcome to Part 5 of the Peercoin Primer. Peercoin is one of the world’s most established cryptocurrencies, and each video in this series will explore a different aspect of it.
Show overview onscreen:
Part 1: Launch
Part 2: Security
Part 3: Benefits
Part 4: Economics
Part 5: Mission
In this video, we’re going to talk about Peercoin’s mission. In particular, we will focus on the role of the Peercoin blockchain itself. Sunny King, the anonymous founder of Peercoin, said in 2013: (pause)
“From my point of view, I think the cryptocurrency movement needs at least one ‘backbone’ currency, that maintains a high degree of decentralization, maintains a high level of security, but doesn’t necessarily provide a high volume of transactions.” (pause)
When Sunny talked about Peercoin as a backbone currency, he was actually introducing a concept that has since become known in the broader crypto community as a settlement layer.
In the early days of cryptocurrency, it was believed by many that the Bitcoin blockchain would compete with other payment processing networks such as Visa or Mastercard, and even act as a replacement for paper money. However, in reality it turned out that decentralized blockchains struggle to support high transaction volumes, and attempting to do so actually runs the risk of centralizing a blockchain’s security over time. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale by the general population.
A more viable path toward supporting mass use of cryptocurrency is by refocusing the role of the blockchain away from day to day payment processing and toward the role of settlement layer, thus permitting the maximum decentralization within the blockchain, while utilizing separate technologies like layered scaling secondary layer technologies to indirectly increase the transaction capacity of blockchains.
NOTE: The word “indirectly” is important to keep in this sentence. The transaction capacity of the blockchain is not directly increased. It actually remains the same. The transaction capacity is increased indirectly by pushing many transactions off the layer 1 blockchain to layer 2, which are separate and independent networks. So the increase is only actually happening through layer 2.
With layered scaling secondary layers, rather than transactions taking place directly on the blockchain, they are instead conducted off the blockchain through separate, independent layers networks built specifically for large volume and high speed transaction processing. This prevents congestion on the main blockchain by allowing microtransactions to be offloaded onto these secondary layer networks. In this way, the blockchain is treated as the settlement and foundational settlement layer in a multilayered network.
At its essence, a blockchain is a public ledger where digital information is recorded and stored in a manner that prevents it from being easily edited or altered in the future. This immutability means the data becomes permanently locked recorded into the blockchain.
As the base of a multilayered network, the blockchain provides a way for digital information to be recorded and distributed without the ability to alter it. This leads to a state of trustless security, where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and immutability of recorded data. This transparency and trustless security is the main value of the blockchain, and the reason why it is utilized as the base layer of the network.
NOTE: I understand from previous scripts that you don’t like using the word trustless. If I recall correctly, you were afraid people who are not familiar with the term would confuse it to mean the opposite, that you couldn’t trust something. However, this trustless state is the main idea behind the blockchain and I think this paragraph is where it’s most needed. I don’t see how there is any possibility of the term being confused here. After we say trustless security, we literally define it for the viewer immediately after as a state “where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and immutability of recorded data.” That sounds like a positive thing to me. As long as we are defining the term in the same paragraph where it is first being used, I don’t see why we can’t include it. So I have inserted it back in unless you have a better reason in mind.
Any independent layers built on the blockchain are designed to take advantage of the permanence of the data stored on the chain. These secondary layer 2 networks undertake functions that the blockchain is incapable of achieving by itself. Together, they form an important relationship. The blockchain records and stores information in a permanent manner, while layer 2 networks expands expand utility by creating new ways of interacting with that information. Without an immutable blockchain as the base of the system, the underlying data that layer 2 interacts with would be more easily compromised. Therefore, layer 2 networks is are only as strong as its their foundation. Equally, without layer 2 networks to expand beyond existing functionality, the blockchain would be less useful, as data would be stored with fewer ways of interacting with it.
An One example of layer 2 in action is the Lightning Network, which was developed in order to help scale the Bitcoin blockchain. Microtransactions can be are offloaded and processed through Lightning, while the blockchain is utilized to record final settlement, hence the name settlement layer. Other layer 2 examples include PeerAssets, a blockchain agnostic token protocol, and Perpera, a document audit protocol, both developed by the Peercoin Team. However there are other ways of handling layer 2 and Lightning is only one possible application. Other examples include atomic swaps, tokens, and smart contract protocols. Not only does layer 2 help solve transaction scaling issues, it also gives birth to a broader ecosystem of new utility with the blockchain as its foundation foundational settlement layer.
NOTE: Robert suggested removing the above sentence. Previously it was located at the end of the following paragraph, but rather than remove it, I decided to relocate the sentence to the end of the above paragraph. I did this because the paragraph is mainly talking about new utility provided by layer 2, and this sentence works as a concluding remark about this topic. Also, the next paragraph says “the Peercoin blockchain’s mission was to become this settlement layer,” so I felt I had to use the term settlement layer at the end of the paragraph above, so it makes sense to bring it up again at the beginning of the next paragraph.
As Sunny King intended in 2012, the Peercoin blockchain’s mission was to become this settlement layer. which This shows incredible forethought, as Bitcoin did not adopt this strategy until years later after it became obvious the blockchain alone could not support transactions on a mass scale.
From the outset, all of Peercoin’s design choices were made with the this objective goal of becoming a robust settlement layer. We’ve discussed these design choices in videos 1 to 4; to recap, they include: removing the conflict of interests between miners and coin holders by allowing coin holders to mint their own blocks; achieving an efficient and inexpensive security protocol based on scarcity of time, rather than electricity; attaining geographical decentralization of minting power; allowing for 1% annual inflation to prevent deflation; and removing transaction fees as a means of compensating block producers, replacing them instead with a continuous block reward.
Further, these design choices mean that Peercoin actually acts better as a settlement layer than Bitcoin blockchains like Bitcoin that rely on security through transaction fees. Given that Peercoin’s security is maintained through a continuous block reward, and not through transaction fees, there can never be competition between Peercoin’s block producers and layer 2 node operators for transaction fees. since This it eliminates the conflict of interests when both the settlement layer and 2nd layer node operators chase the same users for fees, In conclusion, Peercoin can sustain its own security without competing for transaction fees with 2nd layer node operators, ensuring that all layer 2 infrastructure is perfectly aligned with Peercoin as its foundation.
NOTE: I added back in the word node here, because I think it makes it more specific about who exactly these operators are. Obviously, they operate the nodes for layer 2 networks. I also felt with your edit, the middle sentence went on too long and sounded confusing, so I moved some stuff around to hopefully make it easier to understand.
NOTE 2: Unwritten concluding paragraph
If you enjoyed these videos, and want to learn more about Peercoin, be sure to head over to the official website at peercoin.net. There’s also a great community, very knowledgeable and friendly, on the official forums at talk.peercoin.net. And lastly, there’s a ton more educational material in the Peercoin University, at university.peercoin.net, where you can really get in-depth with this beautiful blockchain.
If you have any questions or comments, let us know! Post below the video, or just head over to the forums. We’d love to hear from you.
Oh, and don’t forget to subscribe. I’m Chronos. Thanks for watching!
Without Formatting
Hi, I’m Chronos, and welcome to Part 5 of the Peercoin Primer. Peercoin is one of the world’s most established cryptocurrencies, and each video in this series will explore a different aspect of it.
Show overview onscreen:
Part 1: Launch
Part 2: Security
Part 3: Benefits
Part 4: Economics
Part 5: Mission
In this video, we’re going to talk about Peercoin’s mission. In particular, we will focus on the role of the Peercoin blockchain itself. Sunny King, the anonymous founder of Peercoin, said in 2013: (pause)
“From my point of view, I think the cryptocurrency movement needs at least one ‘backbone’ currency, that maintains a high degree of decentralization, maintains a high level of security, but doesn’t necessarily provide a high volume of transactions.” (pause)
When Sunny talked about Peercoin as a backbone currency, he was actually introducing a concept that has since become known in the broader crypto community as a settlement layer.
In the early days of cryptocurrency, it was believed by many that the Bitcoin blockchain would compete with other payment processing networks such as Visa or Mastercard, and even act as a replacement for paper money. However, in reality it turned out that decentralized blockchains struggle to support high transaction volumes, and attempting to do so actually runs the risk of centralizing a blockchain’s security over time. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale by the general population.
A more viable path toward supporting mass use of cryptocurrency is by refocusing the role of the blockchain away from day to day payment processing and toward the role of settlement layer, thus permitting maximum decentralization within the blockchain, while utilizing secondary layer technologies to indirectly increase the transaction capacity of blockchains.
With secondary layers, rather than transactions taking place directly on the blockchain, they are instead conducted off the blockchain through separate, independent networks built specifically for large volume and high speed transaction processing. This prevents congestion on the main blockchain by allowing microtransactions to be offloaded onto these secondary layer networks. In this way, the blockchain is treated as the foundational settlement layer in a multilayered network.
At its essence, a blockchain is a public ledger where digital information is recorded and stored in a manner that prevents it from being easily edited or altered in the future. This immutability means the data becomes permanently recorded into the blockchain.
As the base of a multilayered network, the blockchain provides a way for digital information to be recorded and distributed without the ability to alter it. This leads to a state of trustless security, where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and immutability of recorded data. This trustless security is the main value of the blockchain, and the reason why it is utilized as the base layer of the network.
Any independent layers built on the blockchain are designed to take advantage of the permanence of the data stored on the chain. These secondary layer networks undertake functions that the blockchain is incapable of achieving by itself. Together, they form an important relationship. The blockchain records and stores information in a permanent manner, while layer 2 networks expand utility by creating new ways of interacting with that information. Without an immutable blockchain as the base of the system, the underlying data that layer 2 interacts with would be more easily compromised. Therefore, layer 2 networks are only as strong as their foundation. Equally, without layer 2 networks to expand beyond existing functionality, the blockchain would be less useful, as data would be stored with fewer ways of interacting with it.
One example of layer 2 in action is the Lightning Network, which was developed in order to help scale the Bitcoin blockchain. Microtransactions are offloaded and processed through Lightning, while the blockchain is utilized to record final settlement, hence the name settlement layer. However there are other ways of handling layer 2 and Lightning is only one possible application. Other examples include atomic swaps, tokens, and smart contract protocols. Not only does layer 2 help solve transaction scaling issues, it also gives birth to a broader ecosystem of new utility with the blockchain as its foundational settlement layer.
As Sunny King intended in 2012, the Peercoin blockchain’s mission was to become this settlement layer. This shows incredible forethought, as Bitcoin did not adopt this strategy until years later after it became obvious the blockchain alone could not support transactions on a mass scale.
From the outset, all of Peercoin’s design choices were made with the goal of becoming a robust settlement layer. We’ve discussed these design choices in videos 1 to 4; to recap, they include: removing the conflict of interests between miners and coin holders by allowing coin holders to mint their own blocks; achieving an efficient and inexpensive security protocol based on scarcity of time, rather than electricity; attaining geographical decentralization of minting power; allowing for 1% annual inflation to prevent deflation; and removing transaction fees as a means of compensating block producers, replacing them instead with a continuous block reward.
Further, these design choices mean that Peercoin actually acts better as a settlement layer than blockchains like Bitcoin that rely on security through transaction fees. Given that Peercoin’s security is maintained through a continuous block reward, and not through transaction fees, there can never be competition between Peercoin’s block producers and layer 2 node operators for transaction fees. This eliminates the conflict of interests when both the settlement layer and 2nd layer node operators chase the same users for fees, ensuring all layer 2 infrastructure is perfectly aligned with Peercoin as its foundation.
Unwritten concluding paragraph
If you enjoyed these videos, and want to learn more about Peercoin, be sure to head over to the official website at peercoin.net. There’s also a great community, very knowledgeable and friendly, on the official forums at talk.peercoin.net. And lastly, there’s a ton more educational material at university.peercoin.net, where you can really get in-depth with this beautiful blockchain.
If you have any questions or comments, let us know! Post below the video, or just head over to the forums. We’d love to hear from you.
Oh, and don’t forget to subscribe. I’m Chronos. Thanks for watching!