Founded during the early stages of 2014, BlackCoin is a truly innovative digital currency used to store and transfer value. While in its early stages it was almost identical to Bitcoin, things have changed and the coin is now significantly different than its was originally designed. Though that may sound like a bad thing, it really isn’t, because the coin now operates in a different fashion, and one that many other cryptocurrencies do not.
What Is BlackCoin?
In order to explain what BlackCoin is, we feel as though it is best to simply take the words straight from their website. According to the source, BlackCoin is a peer-to-peer digital currency with a distributed public ledger. As you may or may not know, the public ledger, or blockchain, is the transparent, publicly available listing of all the transactions that have ever taken place. Bitcoin uses a blockchain as well and it is the means by which you, I, or anyone else can verify and audit the network.
Unlike banks, which keep the transaction history of clients under wraps, BlackCoin’s network affords everyone and anyone the ability to authenticate it. While this may sound like BlackCoin puts all of your information out there for anyone to see, this is not the case. The blockchain may show individual transactions, however it does not publish the names, locations, or any other information about the parties partaking in the aforementioned transactions, thus making it both safe and secure.
If, after that explanation, you are thinking that BlackCoin’s network sounds a lot like Bitcoin’s, that is because the two are similar. With that being said, there is one fundamental difference that makes Bitcoin (and cryptocurrencies similar to it) very different from BlackCoin.
Proof-of-Work vs. Proof-of-Stake
To be able to understand how BlackCoin operates, you must first understand how Bitcoin (and some other cryptocurrencies) operate(s). When it comes to Bitcoin, the grease that makes the gears go is its Proof-of-Work (PoW) concept. PoW is the way by which blocks of the blockchain are formed, and is ultimately the way by which the whole Bitcoin network operates.
In order for a BTC transaction to take place, you not only need 2 participating and willing parties, you also need the miners who verify the transactions legitimacy so that it can be processed and added to the blockchain. Multiple transactions build a block on the chain, and it is the role of miners to verify the legitimacy of these transactions. In order to verify the legitimacy of a given transaction, miners (or their computers) must solve what is referred to as a proof-of-work problem.
Once solved, the miner is rewarded for his or her work, and the verified transaction is published on the public ledger. In essence, what we refer to as Bitcoin mining is nothing more than people offering up a bunch of computing power to the solving of a mathematical riddle (verifying the transaction, processing it). The solution to that riddle, once computed, results in a completed transaction, which results in the miner(s) who helped facilitate the transaction being rewarded in BTC. This system is great because there is incentive for miners to continue offering up their own computing power to the Bitcoin network, and in doing this the Bitcoin network can continue to run. Without the miners a transaction could not be processed, and without the users the miners would never be rewarded.
While the offering of computer power for a reward seems to be mutually beneficial for both the miners and users of BTC as a whole, the process is actually time-consuming and about as energy inefficient as it gets. While it may be difficult to think of the Bitcoin network in the same light as other energy-wasting industries and businesses, that line of thought is not entirely off.
For people who are puzzled by the sustainability of Bitcoin, that is where BlackCoin comes in. Rather than a PoW concept, BlackCoin utilizes a Proof-of-Stake concept. PoS and PoW strive to reach the same goal, but they do so in an entirely different way. Instead of having the person who verifies the transaction (miner, forger) offer up computing power to execute the exchange, Proof-of-Stake requires one to prove their ownership of BlackCoin in order to facilitate the transaction. The way in which formers of a block on the chain are determined has everything to do with how much BlackCoin you are staking.
You might be wondering how one reaps a reward in the PoS system, and the answer to that is quite simple. Rather than being rewarded for every block created, miners, or forgers as they are known in the BlackCoin world, are paid in interest earned from the coins that are staked. This incentivizes the aspiring forger to possess more BlackCoin in hopes of receiving a larger reward in the end. On top of all of this, it is different than PoW in that you have to be using the cryptocurrency in order to be a part of the network.
With Bitcoin, many miners do not themselves own any Bitcoin. Even scarier is the remote possibility that one entity controls more than 50% of the computational power behind the Bitcoin network. Though this is not a likely scenario, it is theoretically possible. If this situation were to unfold, the entity controlling 51%+ of the network’s computational power will have assumed ultimate power over the network, something that defeats the purpose of cryptocurrencies altogether. In addition, it can lead to a sabotage that could dismantle the network entirely. With PoS, there is not a chance that someone can gain that type of control, they can only gain more and more coins.
There is no one who has officially proven which system is better, but people are leaning more and more towards PoS simply because it is more environmentally friendly and it makes sense that those helping the network run are participants in the network themselves.
How to Acquire
Now that you understand more about what BlackCoin is and how it functions, it is now time to get your hands on some. Doing so really could not be easier and is in line with how you acquire most other cryptocurrencies.
On the internet, there are any number of cryptocurrency exchanges whereby you can lay claim to BlackCoin. At these sites, you can exchange either fiat currency such as the US Dollar for BlackCoin, or trade another cryptocurrency. In some cases, the exchanges are one in the same, but on occasion you will find an exchange that will not allow you to purchase BlackCoin with Bitcoin. This all comes down to doing a bit of research as well as establishing a preference for yourself.
If you think that you will primarily want to make USD/BlackCoin–BlackCoin/USD transactions, then search for exchanges where that is the primary way to fund your wallet. If you are hoping to deal more with cryptocurrencies than fiat currencies, you will likely need to find an exchange that deals with both. At the end of the day, finding the exchange that most closely aligns with your wants and needs is no monumental task, but will take a bit of research.