My update is basically finished, but I’m going to hold it off for another 5 hours and review one more time in the morning before I post it.
Besides cleaning up some of the language, I found ways to keep some of my favorite sentences that were in danger of being discarded.
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 decentralized blockchains networks 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale by a global population.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. In this updated role, day to day transaction processing is mostly conducted off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
NOTE: This paragraph, is almost completely reorganized, so I bolded the entire thing
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, which locks them where they are locked. After a short waiting period, the coins are released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant payments transactions, smart contracts, and overall greater scalability. When the user is finished using with these expanded functions, the user they can then settle by returning his their coins to the parent blockchain.
Vertical scaling involves separate, networks that are built specifically for large volume and high speed processing. These independent networks that are not blockchains, but less decentralized secondary layers that exist on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed transaction processing. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically.
Both technologies prevent congestion on the main blockchain by allowing transactions to be offloaded onto off-chain networks. In this way, the initial blockchain acts as the foundation of a multilayered network by records recording the final settlement of transactions that mainly take place off the chain, processed by networks of sidechains or secondary layers hence the name settlement layer.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for just such a settlement layer which would not, in itself, carry high transaction loads This means that,. From the outset, Peercoin has the distinction that all of Peercoin’s its design choices were made with this goal role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. **At its essence, Any blockchain being used as a settlement layer must have integrity as a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin.
Independent Sidechains and secondary layers built on top of the blockchain are both designed to leverage the permanence of the this data stored on the chain data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The blockchain settlement layer records and stores information in a permanent manner, while secondary layers the working layer expands functionality off-chain** utility by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, it they can also give birth to a broader ecosystem of new utility with the blockchain Peercoin as its settlement layer foundation.
NOTE: I felt this was an important paragraph to keep, so I simply adapted it.
One example of secondary layers in action development is the Lightning Network, originally designed to help scale the Bitcoin blockchain. Transactions are offloaded and processed through Lightning, while the blockchain is Peercoin can be used to record final settlement of transactions taking place off-chain through the Lightning Network. Lightning is only one example of a secondary layer application. Another example is a project called Open Transactions.
NOTE: Lightning is already operational, so I reverted the word development to action.
Peercoin actually acts better as a settlement layer than blockchains that rely on security through transaction fees. Given that Peercoin’s security is maintained through a continuous block reward, and not transaction fees, there can never be competition between Peercoin’s block producers and secondary layer node operators for transaction fees. This eliminates the conflict of interests that exist when both settlement and secondary layers chase the same users for fees.
NOTE: Unfortunately, the wording of Robert’s updated paragraph was difficult for me to follow, (also fee conflicts do not apply to sidechains) so I have reverted it to its previous form. The only change I made is to trim off part of the intro.
Concluding paragraph (Tie up vertical/horizontal scaling and Peercoin)
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!
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 decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. In this updated role, day to day transaction processing is mostly conducted off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked. After a short waiting period, the coins are released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves separate, independent networks that are not blockchains, but less decentralized secondary layers that exist on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed transaction processing. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically.
Both technologies prevent congestion on the main blockchain by allowing transactions to be offloaded onto off-chain networks. In this way, the blockchain acts as the foundation of a multilayered network by recording the final settlement of transactions that mainly take place off the chain, hence the name settlement layer.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement layer. From the outset, all of Peercoin’s design choices were made with this role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin.
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation.
One example of secondary layers in action is the Lightning Network, designed to help scale the Bitcoin blockchain. Peercoin can be used to record final settlement of transactions taking place off-chain through the Lightning Network. Lightning is only one example of a secondary layer application. Another example is a project called Open Transactions.
Peercoin actually acts better as a settlement layer than blockchains that rely on security through transaction fees. Given that Peercoin’s security is maintained through a continuous block reward, and not transaction fees, there can never be competition between Peercoin’s block producers and secondary layer node operators for transaction fees. This eliminates the conflict of interests that exist when both settlement and secondary layers chase the same users for fees.
Concluding paragraph (Tie up vertical/horizontal scaling and Peercoin)
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!
I ran out of time yesterday, but will attempt to write a concluding paragraph later that wraps everything up. Once again, I’m not worried as much about the time length for this video.
Hope to get to this tomorrow (Friday).
This has already been well covered - I think something more outward or long-term like PPC’s ongoing decentralisation vs POW’s centralisation - or something similar - why we expect PPC to be around and kicking in fifty years.
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 decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. In this updated role, Day to day transaction processing is mostly conducted off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked After a short waiting period, the coins are and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves separate, independent networks that are not blockchains, but less decentralized secondary layers that exist on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed transaction processing. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically.
Both technologies prevent congestion on the main blockchain by allowing transactions to be offloaded onto off-chain networks. In this way, the blockchain acts as the foundation of a multilayered network by recording the final settlement of transactions that mainly take place off the chain, hence the name settlement layer.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement layer. From the outset, all of Peercoin’s design choices were made with this role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin.
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation.
One example of secondary layers in action is the Lightning Network, designed to help scale the Bitcoin blockchain. Peercoin can be used to record final settlement of transactions taking place off-chain through the Lightning Network. Lightning is only one example of a secondary layer application. Another example is a project called Open Transactions.
Peercoin actually acts better as a settlement layer than blockchains that rely on security through transaction fees. Given that Peercoin’s security is maintained through a continuous block reward, and not transaction fees, there can never be competition between Peercoin’s block producers and secondary layer node operators for transaction fees. This eliminates the conflict of interests that exist when both settlement and secondary layers chase the same users for fees.
Peercoin performs well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
NOTE: I think I finally managed to simplify this paragraph to make it easy to understand.
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!
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 decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. Day to day transaction processing is mostly conducted off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves separate, independent networks that are not blockchains, but less decentralized secondary layers that exist on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed transaction processing. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically.
Both technologies prevent congestion on the main blockchain by allowing transactions to be offloaded onto off-chain networks. In this way, the blockchain acts as the foundation of a multilayered network by recording the final settlement of transactions that mainly take place off the chain, hence the name settlement layer.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement layer. From the outset, all of Peercoin’s design choices were made with this role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin.
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation.
One example of secondary layers in action is the Lightning Network, designed to help scale the Bitcoin blockchain. Peercoin can be used to record final settlement of transactions taking place off-chain through the Lightning Network. Lightning is only one example of a secondary layer application.
Peercoin performs well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
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!
I have removed the paragraph toward the end about the Lightning Network and instead inserted it as one sentence in the paragraph that is solely about vertical scaling. I also made some other modifications to this paragraph.
—
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 decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. Day to day transaction processing is mostly conducted off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves separate, independent networks that are not blockchains, but less decentralized secondary layers that networks that exist live as secondary layers on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed transaction processing. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically. One such example is the Lightning Network, which was designed to vertically scale the Bitcoin blockchain.
Both technologies prevent congestion on the main blockchain by allowing transactions to be offloaded onto off-chain networks. In this way, the blockchain acts as the foundation of a multilayered network by recording the final settlement of transactions that mainly take place off the chain, hence the name settlement layer.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement layer. From the outset, all of Peercoin’s design choices were made with this role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin.
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation.
One example of secondary layers in action is the Lightning Network, designed to help scale the Bitcoin blockchain. Peercoin can be used to record final settlement of transactions taking place off-chain through the Lightning Network. Lightning is only one example of a secondary layer application.
Peercoin performs well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
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!
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 decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. Day to day transaction processing is mostly conducted off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves less decentralized networks that live as secondary layers on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed transaction processing. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically. One such example is the Lightning Network, which was designed to vertically scale the Bitcoin blockchain.
Both technologies prevent congestion on the main blockchain by allowing transactions to be offloaded onto off-chain networks. In this way, the blockchain acts as the foundation of a multilayered network by recording the final settlement of transactions that mainly take place off the chain, hence the name settlement layer.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement layer. From the outset, all of Peercoin’s design choices were made with this role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin.
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation.
Peercoin performs well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
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!
Even more refinements.
Unless one of you have any more suggestions, I think I’m close to finished editing this. We need to move toward writing a conclusion so we can get this in production.
—
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 decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. With this change in focus, day to day transactions processing is are mostly conducted processed off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves less decentralized networks that live as secondary layers on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed transaction processing payments. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically. One such example is the Lightning Network, which was designed to vertically scale the Bitcoin blockchain.
Both scaling technologies prevent congestion on the main blockchain by allowing transactions to be offloaded offloading transactions onto off-chain separate networks built for high capacity transaction processing. In this way, the blockchain acts as the foundation of a multilayered network by recording the final settlement of transactions that mainly take place off the chain, hence the name settlement layer. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement of transactions on its ledger.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement layer. From the outset, all of Peercoin’s design choices were made with this role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin to retain its long-term viability.
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation.
Peercoin performs well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
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!
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 decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of recordkeeping and transaction processing. With this shift in focus, day to day transactions are mostly processed off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain. This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain. Let’s take a closer look at both forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves less decentralized networks that live as secondary layers on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving by itself, such as the ability to support large volume at low cost, and high speed payments. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically. One such example is the Lightning Network, which was designed to vertically scale the Bitcoin blockchain.
Both scaling technologies prevent congestion on the blockchain by offloading transactions onto separate networks built for high capacity transaction processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement of transactions on its ledger.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement layer. From the outset, all of Peercoin’s design choices were made with this role in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers.
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised. At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin to retain its long-term viability.
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation.
Peercoin performs well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
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!
Updated comments:
+++
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 or base layer.
[ note : I know we want to keep the terminology consistent, but I think the first time we refer to settlement layer, we should reassure the viewer, who might not have heard of the term, that it is the same as a “base” layer - before switching back to calling it a settlement layer ]
In the early days of cryptocurrency, it was believed by many that decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward world global use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of record data keeping and from transaction processing. With this shift in focus, day to day transactions are mostly processed mostly off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement of transactions taking place off-chain , hence the name settlement layer . This has the effect of permitting maximum decentralization, while also increasing - indirectly - the transaction capacity of the blockchain . This has the effect of increasing - indirectly - the transaction capacity of the blockchain, while permitting its maximum decentralization . Let’s take a closer look at both the two forms of off-chain scaling.
[ note on the above : I don’t see a need for “day to day”, “mainly”, “primarily”, since we’re explaining a broad principle, no more]
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and other assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can then settle by returning their coins to the parent blockchain.
Vertical scaling involves less decentralized networks that live exist as secondary layers on top of the blockchain. These secondary layers undertake functions that the blockchain is incapable of achieving unable to achieve by itself, such as the ability to support processing large volumes at low cost, and high speed payments. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically. One such example is the Lightning Network, which was designed to vertically scale the Bitcoin blockchain.
Both scaling technologies prevent congestion on the blockchain by offloading transactions onto separate networks built for high capacity transaction processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement of transactions on its ledger.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a settlement foundational layer. From the outset, all of Peercoin’s design choices were made with this role mission in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers. Peercoin’s characteristics create a stable, secure base for the emerging cryptocurrency eco-system .
Without a blockchain such as Peercoin as the base of the system, the underlying data that sidechains and secondary layers interact with would be more easily compromised . At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin to retain its long-term viability.
[Note : the below paragraph is best moved up, and combined with, the paragraph commencing “Both scaling technologies prevent congestion…” The reference to eco system should be removed, as this better comes after the paragraph describing PPC’s design strengths. Thus, we move from horizontal and vertical scaling to wider matters].
Sidechains and secondary layers are both designed to leverage the permanence of this stored data. Together, they form an important relationship, with a blockchain like Peercoin as the settlement layer and vertical and horizontal scaling making up the working layer. The settlement layer records and stores information in a permanent manner, while the working layer expands functionality off-chain by creating new ways of interacting with that information. Not only do sidechains and secondary layers help solve transaction scaling issues, they can also give birth to a broader ecosystem of new utility with Peercoin as its foundation .
Peercoin performs particularly well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
Concluding paragraph
1 Like
I agree with this and it’s something I wanted to do, however I am having difficulty trying to figure out how.
The issue is that this paragraph talks about the permanence of data recorded on the blockchain before I actually introduce the idea in the paragraph that starts out “at its essence.” It was originally designed to go after this explanation. Do you think this is a problem or no?
This sentence is a bit weird.
day to day transactions are to be processed
Vertical scaling involves less decentralized networks
I think we are close here. Just polish on what @RobertLloyd has just delivered and I think we can wrap it up.
Sentinel said previously that “layer 2” was the popular term. Although I think “secondary layers” fits our video script better, it would do no harm to add “also known as layer 2” to the end of the above sentence, if we want to make it super clear.
I’ve put the two paragraphs side-by-side to compare, and they are very similar. The first of the two paragraphs (starting “Both scaling technologies prevent”) is very succinct and says everything it needs to. The only “new” thing the second paragraph says is “Together, they form an important relationship”, but I think that will be obvious. I would just remove the second paragraph (starting “Sidechains and secondary layers are both designed”)
I went ahead and tried to merge it anyway. I took the most important pieces of the paragraph and formed it into one sentence, which I added onto the end of the first paragraph. It’s the one that starts with the word essentially.
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 or base layer.
In the early days of cryptocurrency, it was believed by many that decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward global use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of record data keeping and from transaction processing. With this shift in focus, day to day transactions are to be processed mostly off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used primarily to record the final settlement, hence the name settlement layer. This has the effect of increasing - indirectly - the transaction capacity of the blockchain, while permitting its maximum decentralization. Let’s take a closer look at the two forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can settle by returning their coins to the parent blockchain.
Vertical scaling involves less decentralized independent networks that exist as secondary layers on top of the blockchain, also known as layer 2. These secondary layers undertake functions that the blockchain is unable to achieve by itself, such as processing large volumes at low cost, and high speed payments. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically. One such example is the Lightning Network, which was designed to vertically scale the Bitcoin blockchain.
Both scaling technologies prevent congestion on the blockchain by offloading transactions onto separate networks built for high capacity transaction processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement of transactions on its ledger. Essentially, sidechains and secondary layers leverage the permanence of the data stored on the settlement layer, expanding utility off-chain by creating new ways of interacting with this data.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a foundational layer. From the outset, all of Peercoin’s design choices were made with this mission in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers. Peercoin’s characteristics create a stable, secure base for the emerging cryptocurrency eco-system.
At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin to retain its long-term viability security.
Peercoin performs particularly well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
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!
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 or base layer.
In the early days of cryptocurrency, it was believed by many that decentralized blockchains 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. Because of this limitation, it is difficult for decentralized blockchains to be used on a mass scale.
A more viable path toward global use of cryptocurrency is achieved by shifting the role of the blockchain to that of a settlement layer. This is attained by splitting the blockchain’s responsibilities of record keeping and transaction processing. With this shift in focus, transactions are to be processed mostly off the blockchain through the use of vertical and horizontal scaling technologies, while the blockchain is used to record final settlement, hence the name settlement layer. This has the effect of increasing - indirectly - the transaction capacity of the blockchain, while permitting maximum decentralization. Let’s take a closer look at the two forms of off-chain scaling.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain through a two-way peg. This two-way peg makes it possible for cryptocurrency and assets to be exchanged between the parent blockchain and the sidechain. As an example, a user can send some of their coins from the parent blockchain to a specific address, where they are locked and then released to the sidechain. As sidechains are typically designed to increase functionality, the user now has access to low cost and near instant transactions, smart contracts, and overall greater scalability. When the user is finished with these expanded functions, they can settle by returning their coins to the parent blockchain.
Vertical scaling involves independent networks that exist as secondary layers on top of the blockchain, also known as layer 2. These secondary layers undertake functions that the blockchain is unable to achieve by itself, such as processing large volumes at low cost, and high speed payments. Whereas we think of sidechains as allowing the blockchain to scale horizontally, secondary layers allow it to scale vertically. One such example is the Lightning Network, which was designed to vertically scale the Bitcoin blockchain.
Both scaling technologies prevent congestion on the blockchain by offloading transactions onto separate networks built for high capacity transaction processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement of transactions on its ledger. Essentially, sidechains and secondary layers leverage the permanence of the data stored on the settlement layer, expanding utility off-chain by creating new ways of interacting with this data.
Peercoin’s creator Sunny King showed incredible forethought in 2012 when he anticipated the need for such a foundational layer. From the outset, all of Peercoin’s design choices were made with this mission in mind. We’ve discussed these design choices in videos 1 to 4; 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 block producers; allowing for 1% annual inflation to prevent deflation and to incentivize minting; and replacing transaction fees with a continuous block reward, as a means of compensating block producers. Peercoin’s characteristics create a stable, secure base for the emerging cryptocurrency eco-system.
At its essence, a blockchain is a distributed public ledger which records and stores information in such a manner that prevents it from being edited or altered. This immutability means data becomes permanently recorded into the blockchain, leading to a state of trustless security where all users of the network can depend on the blockchain’s ability to guarantee the accuracy and permanence of recorded data. This is the core value of the settlement layer and why it must have the characteristics of a blockchain like Peercoin to retain its long-term security.
Peercoin performs particularly well as a settlement layer thanks to its security model. Many settlement layers conflict with vertical scaling because their block producers and the node operators of secondary layers chase the same users for transaction fees. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
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!
With that out of the way, I will now attempt to write a concluding paragraph so we can finish this up.
Looks good, needs an ending paragraph. The part where you delve into horizontal scaling is the only part where I thought you might start losing people with the technical talk, but I’m not sure it can be helped.
I’ve had another read through, and it’s looking very good. I’ve comments on two paragraphs.
In this one, it is well established by this point that we are dealing with transactions, so I think we can remove two of the three instances where “transactions” is used:
In this one, I think “conflict” is possibly too strong, and that the paragraph benefits from restructuring.
Hey guys, please don’t feel you have to wait for me if you have an idea for the ending paragraph. Personally I think in the beginning it should quickly tie up what we’ve been discussing up to this point in the text, but then it should switch toward answering Nagalim’s question below…
I feel the best way to end it is like Nagalim said above. The majority of the script explains why the larger crypto community needs Peercoin, but we should briefly explain why the world needs Peercoin and how it can benefit everyone. Here are some more comments below.
I’ll update with any thoughts I have, but I don’t think we should tie up what has been previously said. I think we should go straight to a conclusion based on Nagalim’s approach.
Maybe you’re right. It did kinda tie up everything neatly in the following paragraphs. Anything else would most likely just be repeating the same ideas.