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LogoutWhile Peercoin is built on the same architecture as Bitcoin, the two cryptocurrencies differ in their approaches to mining. Bitcoin uses a PoW mechanism to protect its network, whereas Peercoin is a hybrid cryptocurrency that also uses PoS. Peercoin was the first virtual currency to use Proof of Stake.
Participants who already possess Peercoin are the ones that validate transactions on the network under a PoS scheme. The greater the number of peercoins a person has, the more valuable their verification is to the network. Because having more peercoins benefits miners, this approach is designed to encourage users to conserve their Peercoins (rather than spending it). Peercoin is a more energy-efficient means of protecting the blockchain than Bitcoin.