Peercoin was first conceived as an answer to growing sustainability concerns surrounding another cryptocurrency. Some specialty online retailers take payments in the currency, but these remain few and far between. With a little digging, you can exchange Peercoins for survival gear, video games, jewelry and more. Some charitable companies also accept payments in Peercoin.
A proof-of-work verification system, while very secure, requires the constant expenditure of large quantities of energy by every computer on the network, just to qualify to participate. Peercoin's key innovation is its hybrid verification system. Coins are initially mined using a proof-of-work system. However, as the number of coins increases, Peercoin gradually shifts over to a proof-of-stake system, which requires much less energy to operate, while remaining secure.
The difference between Peercoin's proof-of-stake system and the traditional proof-of-work system is that the right to verify a transaction goes to the user with the greatest "stake" – or stockpile – of the currency. This doesn't mean that the richest user always gets to verify transactions; coins only count towards a user's total once every 30 days. Since tracking the number of coins each user has requires much less energy than constantly solving difficult math problems, Peercoin's energy consumption is predicted to drop over time, rather than skyrocketing. Peercoin also boasts a vibrant community of developers – its open-source codebase has been under constant development since its inception.
One security concern surrounding Peercoin is that if one user manages to acquire more than half of the coins in the system, that person might be able to consistently verify transactions. However, acquiring more than half of the currency is believed to be even more difficult than amassing 51 percent of the processing power on the network, so this is a minor danger at best. The more serious concern is price stability. From a high of nearly $100,000, Peercoin's market cap plummeted to under $20,000. The value of a single Peercoin suffered heavily and shows few signs of improvement. This is not unique among cryptocurrencies, but it is a concern.
While many investors may be tempted by the high value and reputation of other cryptocurrencies, the designers of Peercoin have put much more thought into the future of their currency. By ensuring that the energy requirements of the currency stay manageable over time, Peercoin is a sustainable option for those who are serious about permanently integrating cryptocurrencies into the world economy. While price stability is a definite concern, Peercoin has the potential to repay an investor's confidence in the long run.