Just to get the final paragraph going, here’s a first line:
We hope you have enjoyed this, and the previous four videos, and that we have shown you that Peercoin is not just another crypto-clone, but an exceptional blockhain with a lasting Mission.
1 Like
but an exceptional, well designed blockchain with a lasting mission.
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 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 original creators showed incredible forethought in 2012 when he they 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.
NOTE: Edits by Peerchemist
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 compete with vertical scaling because their block producers chase the same users for transaction fees as 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.
Peercoin is revolutionizing censorship resistant 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 that has the potential to benefit society in countless ways. We hope you have enjoyed this, and the previous four videos, and that we have shown you you have come to the realization that Peercoin is not just another crypto-clone, but an exceptional, well designed blockchain with a lasting mission.
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 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 processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement 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 original creators showed incredible forethought in 2012 when they 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 compete with vertical scaling because their block producers chase the same users for transaction fees as the node operators of secondary layers. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
Peercoin is revolutionizing censorship resistant 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 that has the potential to benefit society in countless ways. We hope you have enjoyed this, and the previous four videos, and you have come to the realization that Peercoin is not just another crypto-clone, but an exceptional, well designed blockchain with a lasting mission.
If you 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 talked it over with Peerchemist and we thought what Nagalim wrote sounded very nice, so I simply merged what he and Robert wrote, and included a couple edits. Let me know if you think it works as a conclusion, or if you think we need to improve it some more.
I think it is important that the concluding paragraph starts with “We hope you have enjoyed this, and the previous four videos”, as it signals that it is the conclusion, and gives us “permission” to make our final point.
Quite separately, I’ve been googling “future of the blockchain”, pinched some ideas, and came up with this:
+++
We hope you have enjoyed this, and the previous four videos, and you have come to the realization that Peercoin is not just another crypto-clone, but an exceptional and well designed blockchain with a lasting mission; that of preparing a foundation for crypto’s re-definition of possession and trust - away from information flows conducted via central authorities and between parties which are untrusted, towards a society where every actor, asset or transaction has its own blockchain identity that certifies and tracks authenticity.
Edit:
I got some of the wording/ideas from here:
https://www.blockchain-council.org/blockchain/future-of-blockchain-predictions-for-2030/
2 Likes
That’s pretty good. I like how it restates the mission of maintaining a solid foundation for all these upcoming changes.
The word “already” is not needed here, as “forethought” and “anticipated” are enough.
1 Like
@Nagalim @peerchemist do you have any last feedback on the conclusion or the script overall, or are we fine with going to production now?
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 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 processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement 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 original creators showed incredible forethought in 2012 when they 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 compete with vertical scaling because their block producers chase the same users for transaction fees as the node operators of secondary layers. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
We hope you have enjoyed this, and the previous four videos, and you have come to the realization that Peercoin is not just another crypto-clone, but an exceptional and well designed blockchain with a lasting mission; that of preparing a foundation for crypto’s re-definition of possession and trust - away from information flows conducted via central authorities and between parties which are untrusted, towards a society where every actor, asset or transaction has its own blockchain identity that certifies and tracks authenticity.
If you 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’ve printed out a copy, and will also give it a another read through …
Can drop “technologies” here.
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.
Unnecessary technical details and does not handle some edge cases and different implementations.
Also it saves quite a few seconds of viewers time.
An extra “vertical” there, it’s getting repetitive.
What about the last sentence of this paragraph? If you remove these sentences, then the last sentence doesn’t make sense to keep anymore. This one…
That is there because we are only talking about secondary layers here, not sidechains. Calling it just scaling may be confusing.
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.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain. Sidechains are typically designed to increase functionality, providing the user 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 their coins to the parent blockchain.
how about this?
I’d still drop “vertical”.
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 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.
Horizontal scaling involves sidechains, which are separate blockchains linked to a parent blockchain. Sidechains are typically designed to increase functionality, providing the user 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 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 processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement 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 original creators showed incredible forethought in 2012 when they 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 compete conflict with vertical scaling because their block producers chase the same users for transaction fees as the node operators of secondary layers. 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 have changed compete back to conflict here. The reason is because the word compete doesn’t necessarily mean it’s a bad thing, while conflict is a little more obvious to the viewer that it’s something that is unwanted
We hope you have enjoyed this, and the previous four videos, and you have come to the realization that Peercoin is not just another crypto-clone, but an exceptional and well designed blockchain with a lasting mission; that of preparing a foundation for crypto’s re-definition of possession and trust - away from information flows conducted via central authorities and between parties which are untrusted, towards a society where every actor, asset or transaction has its own blockchain identity that certifies and tracks authenticity.
If you 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 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, 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. Sidechains are typically designed to increase functionality, providing the user 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 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 processing. The blockchain, acting as a settlement layer and foundation for these off-chain networks, permanently records final settlement 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 original creators showed incredible forethought in 2012 when they 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 scaling because their block producers chase the same users for transaction fees as the node operators of secondary layers. Peercoin avoids this competition and aligns itself with secondary layers by maintaining its security through a continuous block reward, rather than transaction fees.
We hope you have enjoyed this, and the previous four videos, and you have come to the realization that Peercoin is not just another crypto-clone, but an exceptional and well designed blockchain with a lasting mission; that of preparing a foundation for crypto’s re-definition of possession and trust - away from information flows conducted via central authorities and between parties which are untrusted, towards a society where every actor, asset or transaction has its own blockchain identity that certifies and tracks authenticity.
If you 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!
1 Like
1 Like
Fine by me
Would it make sense to insert and here?
We hope you have enjoyed this, and the previous four videos, and you have come to the realization that Peercoin is not just another crypto-clone, but an exceptional and well designed blockchain with a lasting mission; that of preparing a foundation for crypto’s re-definition of possession and trust - away from information flows conducted via central authorities and between parties which are untrusted, and towards a society where every actor, asset or transaction has its own blockchain identity that certifies and tracks authenticity.
I’m afraid of Chronos getting caught in a tongue twister toward the end there, as the sentence goes on for quite a while.
I think this might be the problem area…
1 Like