This will be a tutorial on how to mint using the Peercoin Core Wallet. Before we get started, here is a brief overview of Proof-of-Stake and its mechanisms. For those who have not minted, it is important to understand what the process is and how it contributes to the security of the Peercoin blockchain.
The use of Proof-of-Stake minting in Peercoin is efficient because network security is not dependent on the use of massive amounts of electrical energy (proof-of-energy-burn). Instead, minters invest coins and time to emulate the PoW process. This is done simply by opening up the wallet app, sending coins to an address and letting them sit there while they are occasionally selected by the protocol to mint the next block. This process is both energy and cost efficient.
Because coin owners also produce new blocks in Proof-of-Stake, this means security providers and users of the network are ultimately the same group of people. No longer is there a separate group of security providers who only care about making a profit and are not financially tied to the network itself. All security providers must own a stake in the network through ownership of Peercoin. As everyone has similar financial interests in the long-term future of the network, this leads to much less conflict between factions with different ideas about how the blockchain should develop and evolve.
Because users in Peercoin have the ability to produce blocks, they also have the power to influence and determine the future direction of the network. User governance goes hand in hand with the PoS consensus mechanism. Peercoin is the very first blockchain capable of allowing its protocol rules to be governed directly by its users.
As a direct consequence of the resource efficient consensus mechanism, the number of people capable of participating in the race to create new blocks is significantly expanded. In addition to this, security providers are also no longer drawn to geographical locations with cheap electricity. Due to the cost efficiency of operating a Proof-of-Stake node, minting nodes can be set up anywhere in the world. This allows Peercoin to maximize its level of decentralization and achieve global security from minting users all around the world.
Download & Install the Peercoin Core Wallet
First, you must download the latest version of the Peercoin Core wallet client from GitHub (https://github.com/peercoin/peercoin/releases). After installing and syncing the blockchain, you should be ready to begin. You can find your address by making a payment request from the “Receive” tab. For the purposes of this tutorial, I’ve sent a few peercoins to a newly installed wallet. After the required confirmations, we can then check the minting status of the coins. Remember that each unique transaction is eligible for minting, if the coins remain unspent while they mature. Let’s talk about the rules of minting next.
Coin Age & Coin Days
First, we should define some terms. In a proof-of-work blockchain like Bitcoin, new blocks are created by mining, but in Peercoin’s proof-of-stake, new blocks are created by minting. With mining, participants use processing power to create new coins, and electricity is the scarce resource that is used to secure the network. But in Peercoin’s proof-of-stake, that scarce resource is not electricity, but time. Basically, the older your coins are, the more time they’ve accumulated sitting in your wallet. Coins with a higher time accumulation have more power to participate in securing the network.
Let’s say you own 100 peercoins, and you want to start minting new blocks. After sitting in your wallet for 30 days, your 100 peercoins will start to accumulate “coin days.” If another 30 days goes by, you will have accumulated 3000 coin days, because each of those 100 coins have been accumulating for 30 days. Coin Age is the length of time your peercoins have been sitting in your wallet, while coin days are the actual minting power of your coins. You can think of your coin days as kind of like your hash rate from traditional mining. Accumulating more coin days means you’re more likely to produce a new block on the chain.
The Rules of Minting
The following is a list of rules for minting:
- Minters are first required to hold coins in their wallet for a total of 30 days before they can become eligible to compete in the process of minting new blocks. During this holding time, coinage will be accumulated.
- After 30 days of coin age has been built up, minters will become eligible to produce blocks and coin days will begin accumulating. These coin days are the actual minting power of your coins.
- Peercoins will hit their maximum minting power at 90 days and coin day accumulation will end. Holding peercoins beyond 90 days will do nothing to increase your probability to mint new blocks.
- To discourage periodic minting and promote more continuous minting, a one year limit is imposed on accumulating coin age. If you’ve been holding coins in your wallet for one year, they must be used to mint a block before they can continue earning you rewards. As a result of this limit, stakeholders are discouraged from allowing their peercoin to be inactive for extended periods of time, as they will forfeit any rewards beyond the first year of holding.
- Personal PoS rewards are between 3–5% annually. 3% is from a coinage based reward, while the remainder is from a static reward which tracks with the current supply. Periodic minters can earn 3% while continuous minters can earn up to 5%. It pays more to leave your node minting for longer.
- Minting is predictable. For a given transaction, you can calculate the maximum network PoS difficulty over time for your transaction to be able to mint a PoS block.
- Whenever this PoS difficulty is higher than the current network PoS difficulty, your Peercoin client can mint a PoS block.
- PoS blocks can be rejected (orphans) if several people mint a PoS block within a given window, similar to orphan PoW blocks.
- Coins that have minted a block will automatically have their coinage reset. The coins will also be locked for 520 confirmations (3–4 days).
- Merging transactions, spending coins, etc. burns coinage (resets it to 0).
- The PoS reward is directly added to your transaction which staked (if this transaction is split in two because coinage < 90 days, the reward is equally distributed to both resulting transactions).
The Minting Tab
In order to mint, a transaction must mature for at least 30 days before minting can occur. We can check our transactions and their minting eligibility from the “Minting” tab. The options are “10 min,” “24 hours,” “30 days,” and “90 days”.
The color of the transaction will also change according to the age of the transaction. You can see that the age of the current transaction is currently eight days, 22 short of the required 30 days before you can mint. So until then, you must patiently wait. You can find the minting chance under the “MintProbability” tab on the “Minting” page as well. Remember that once the transaction mints, the new coins will not be available to spend until 520 confirmations have passed.
Unlocking Your Wallet for Minting
If your Peercoin wallet is unencrypted and is holding peercoins, there is nothing you need to do as the wallet will begin minting automatically sometime after crossing the 30 day threshold. If however you previously encrypted your Peercoin wallet with a passphrase, you simply need to go to “Settings,” select “Decrypt Wallet for Minting Only,” and enter your passphrase. Doing this will unlock your wallet only so your coins can be used for minting. Your wallet will not be fully unlocked, as sending peercoin will still require you to enter your passphrase again.
While You’re Waiting
While you are waiting for your stakes to mature beyond 30 days, check out our previous articles, or our podcast Crypto Coffee Sessions. You can also chat with us on Discord, Telegram, and stay up to date with all the latest Peercoin news by visiting our forums, or by following us on Twitter. Happy minting!