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2015/01/06    What is the Peercoin? (in light of NuBits)

“  Peercoin = crypto currency. NuBits = crypto bond with a peg”

“I don’t have confidence in the decentralization or sustainability of proof-of-work assets such as Bitcoin, so I needed a well distributed proof of stake asset external to the Nu network. Peercoin is a popular and stable proof of stake asset with a strong community backing it.”

“Like it was wise to separate the bank (NuShares) from the issued currency (NuBits), it is wise to separate the dividends from both the bank and the currency. Say you have decent amounts of dividends you need to pay. It would be quite simple to pay them with NuBits, because you can create the NuBits ou of thin air. NuBits is young and needs to prove itself being capable of what it was designed for. If believe it does that. But it’s safer to pay dividends with something that already has proven itself. Peercoin is the perfect choice. There’s no drawback for the Nu ecosystem to use Peercoin for dividends, but a benefit. Peercoin is independant from Nu. Peercoin has its own highly sustainable block chain. These benefits remain even if NuBits proves itself.”

“Why are Peercoins needed for the dividend payment? I could argue with “historical” or technical reasons; where Nu comes from, how the NuShares are based on the Peershares template, how the Peershares template is based on the Peercoin source code.

But the reason I see is more an economical one. Like it was wise to separate the bank (NuShares) from the issued currency (NuBits), it is wise to separate the dividends from both the bank and the currency. Say you have decent amounts of dividends you need to pay. It would be quite simple to pay them with NuBits, because you can create the NuBits ou of thin air. NuBits is young and needs to prove itself being capable of what it was designed for. If believe it does that. But it’s safer to pay dividends with something that already has proven itself. Peercoin is the perfect choice. There’s no drawback for the Nu ecosystem to use Peercoin for dividends, but a benefit. Peercoin is independant from Nu. Peercoin has its own highly sustainable block chain. These benefits remain even if NuBits proves itself.

NuBits and NuShares give Peercoin a very important real-world use. The dividends treat Peercoin as the backbone currency it was designed for.”

“What is particularly interesting with Peercoin is the fact it “informatizes” the mining aspect of bitcoin or “softwarizes” it so to speak, so that its security becomes “code” instead of “heat” to put things simple.

Now, it is easy to build things on top of it since it would amount to “traditional” software engineering.
Still, the financial part will remain.
I bet that the value of peercoin would be derived from the usefulness of the tools created on top of it or the services using it.
We can see it already with Nu.
Nu uses peercoin as a dividend transfer instrument.
If dividends increase, the demand for peercoin will increase, increasing its price.
Here peercoin is used as a way to quantify a reward.

So peercoin is software and at the same time a commodity used to quantify a reward produced or by extension a value output within an ecosystem using it.
What is the difference with bitcoin?
Well as bitcoin’s security is very expensive to maintain, it is not worth building things on top of it or building services using it because it is not sustainable. Therefore no sustainable ecosystems centered around bitcoin can exist.
So the value derived from it is thin. Therefore the demand for bitcoin in order to quantify that value is thin.

So peercoin or bitcoin are tokens used to quantify the value produced by the ecosystems using them.”

“At ethereum we generally don’t see blockchains as being financial tools exclusively; they’re more like decentralized computers that people run services on.”

 

Source: peercointalk, discuss.nubits.com, peercointalk chat box, ethereum forum

 

 

 

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