NeuCoin (noo-koin), the newest contender to enter the cryptocurrency ring, is soon to arrive at a computer near you — but NeuCoin isn’t just looking to enter the space, it’s goal is to come in guns blazing with a specific target in its crosshairs: Bitcoin. Derived from Sunny King’s Peercoin (which ironically was derived from Satoshi Nakamoto’s Bitcoin), NeuCoin is an up-and-coming, peer-to-peer powered, decentralized cryptocurrency. It plans to take Bitcoin head-on by improving the technique it inherited from Peercoin, Proof-of-Stake (PoS). This method of mining is fundamentally different than Bitcoin’s Proof-of-Work (PoW), and through its unique design structure, also NeuCoin’s trump card. Think of PoS as the Goku to PoW’s Vegeta.
To understand how NeuCoin plans to improve on Bitcoin’s flaws, let us take a moment to go over what NeuCoin thinks the three main flaws are:
> Prospect of higher transaction fees in order to maintain future security.
> Increasing centralization and corporate control of mining. This can lead to government regulation.
> Divergence of interest between miners (which are becoming increasingly more corporate) and coin holders
These problems can all be boiled down to the fact that PoW requires the use of increasingly expensive resources. Mining Bitcoin is essentially “proof” that a miner did the work of running a software that used electricity and computing power. The problem we’re seeing now is companies paying big bucks for more powerful and energy-efficient computers to establish their mining centers; the little guys who started bitcoin just can’t compete.
NeuCoin hopes to combat these flaws through three main tactics of their own:
> Eliminating operating cost by focusing on the number of coins owned, not resources spent.
> Coinstake (its version of coinbase) rewards are not fixed, and instead are proportionate to the amount of coins and time held — akin to interest.
> As a result, the miner is the coin holder and vice-versa, meaning interests stay the same across the board.
These solutions are only possible as a result of PoS, which issues new coins based on the number of coins owned (stake), not the amount of resources spent. This makes it impossible for corporations to monopolize the network through sheer funds and equipment. This also results in increased security, as it makes it more difficult for one entity to control 51 percent of the network, which is a huge security risk to the network. Through the PoS design, obtaining such a large percentage of the currency at any time, known as a grinding attack, is extremely cost-prohibitive and therefore highly unlikely.
As the grandchild of Bitcoin, NeuCoin improves on its PoS and PoW predecessors by creating a smoother user/customer experience and focusing on tangible utility by allowing easy purchases such as microtransactions. With increased mining reward rates, decreased minimum stake times, and a dynamic stake modifier & duplicate stake detector/punisher, users of NeuCoin should find it a convenient and pleasant experience.
NeuCoin is backed by numerous strategic advisors and angel investors. The currency is supported by well-funded non-profits to ensure stability. $2.25 million was raised in the initial funding round. The currency will be available to the public starting April 17th.