The foundation behind Neucoin revealed today that it is switching the cryptocurrency to pure proof-of-stake (PoS) few months sooner than originally planned.
Neucoin’s founding principle was that distribution of the cryptocurrency should be to all participants in proportion to the value and utility they add to the currency.
The original design called for issuing five million Neucoins per month as proof-of-work (PoW) mining awards for the first 12 months following launch. Neucoin launched its coin presale in April 2015, raising more than 2700 in bitcoins in the second highest altcoin ICO after Ethereum.
The purpose of this limited 12 month PoW component was to engage the large existing PoW mining community, who would in theory become active PoS miners and long-term supporters of the NeuCoin Project. The Neucoin Code Foundation has come to the conclusion that switching to a pure PoS design sooner would best serve existing Neucoin holders.
The foundation says that issuing Neucoins to PoW miners is resulting in steady selling pressure on Neucoin without a sufficient compensating benefit of growing the supportive community of long-term Neucoin holders.
Therefore, the foundation has decided to switch to a pure PoS design at Block 237,000, which is expected on or around February 23, 2016, and when no further PoW rewards will be issued. The Foundation alerts all PoS miners and users running clients to update to the latest version, which will be published on Github and NeuCoin.org.
Although the foundation claims to be transforming to PoS early as a result of selling pressure, there is very little transaction volume in Neucoin at only $400 in the latest 24 hour period.
Neucoin is based on one of the oldest cryptocurrencies, Peercoin, which itself derived Bitcoin but replaced Bitcoin’s PoW algorithm with a PoS consensus mechanism. This effectively replaced the operating costs of Bitcoin miners, namely electricity and hardware costs, with the capital costs of holding the currency.