I think I may have found a solution in response to the various criticisms related to checkpoint and double-spending attacks.

Here is the new proposal for main chain protocol:

The main chain protocol will now score based on proof-of-stake difficulty.
Each proof-of-stake block is scored its proof-of-stake difficulty (proof-of-work block scores 0 or something small like 0.01)
The chain with highest total score is the main chain.

This will work quite similar to Bitcoin's main chain protocol.

Double spending attack will be much much harder.
Checkpoint may be weakened in the future when proof-of-stake protection is strong enough.

I may include this in a 0.2 release. The implementation of this is likely trivial and not affecting current users.

Let me know what you think,

Sunny

We are certainly aware of this viewpoint. But we don't agree that with centralized checkpointing the minters are useless as you claim because:
1) minters provide decentralized minting service and transaction processing
2) checkpoint master is not considered reliable so minters provide high availability

Furthermore we are not fully convinced that decentralization requires massive consumption of energy. We shall see how far we can go along our design.

We encourage folks to read the code and understand the details of the inner workings. Looks like you've been doing it quite well, I would say most of your observations are quite right. We apologize for our current lack of resources.

Double spending is indeed a weakness in the design and that's one of the reasons why checkpoint is needed. I think we have been clear about that in our paper. We will look for other reasonable solutions within our power although that should not be construed as some sort of guarantee.

That's reasonably close to our expectations, we do expect some level of double-spending protection if checkpoint is not there. How strong that protection is we shall see. The current checkpoint policy leaves up to 4 hours window for folks to try mounting double-spending attacks, although this test is probably a couple months away. If you cannot tolerate any slightest double-spending risks please do wait for the checkpoint.

Meeting the hash target is supposed to be hard (once every 10 minutes in the network). Even though it did not consume energy, you are not supposed to come up with these with ease. If you do come up with some kernel meeting the target, it's probably deserved to be checked by everybody.

- Initial release is command line (daemon) only. If you don't know how to use it read Bitcoin wiki and our wiki or ask others for help.
- Proof-of-work difficulty starts at 256 and then continuously adjust (same as bitcoin hash algorithm)
- No premine. See the prerelease thread. Release build was published 5 minutes before block chain start time
- Checkpoint will try to checkpoint *every* proof-of-work block. This way malicious powerful miners can't kick good nodes' blocks. We will review this policy after the network begins to mature.

Thank you for your support in our prerelease thread https://bitcointalk.org/index.php?topic=99735.0.

PPCoin block chain is up and running and officially started at 2012-08-19 18:00:00 UTC.

Source code has been released on github for public viewing.

Design paper has been released to public on our website https://www.peercoin.net/ http://www.ppcoin.org/.

We will be monitoring the network in the following week and update our wiki.

Please check this forum and our website https://www.peercoin.net/ http://www.ppcoin.org/ for periodic updates.

Cheers!

- PPCoin development team

Update:

Release build (including source code) is now available at http://www.ppcoin.org/.
(Sourceforge)

Thanks for the comments. Once the beta release settles down a bit I may get around to answer some questions and concerns.

I have created a wiki page and provided a sample ppcoin configuration file.
Release builds will be available shortly.

Update:

Our paper is now published at http://www.ppcoin.org/.

Release builds have been completed and block chain is on schedule to start at

SUNDAY 2012-08-19 18:00:00 UTC

Release build and source code will be released 5 minutes before block chain start time.

Thank you for your support!

There are different ways of designing proof-of-stake. Some of the designs do not require collecting large number of signatures. Our design will be made public by the coming Sunday so in due time we welcome the crypto-currency/Bitcoin community to examine our design.

The 'distributed inflation mechanism' known as proof-of-stake has now been built. We have been working on this for almost a year and just now we are releasing a new block chain this coming weekend.

https://bitcointalk.org/index.php?topic=99735.0

We are busy preparing the final build of the release. Official block chain is tentatively scheduled to start at SUNDAY 2012-08-19 18:00:00 UTC

Disclaimer: This is experimental beta software so play at your own risk. We reserve the right to restart block chain should severe flaws require such actions but we will try our best to avoid such scenario as much as possible.

Release builds will be available for download a few hours before the scheduled block chain start time. Source code and design paper will be available around the same time or earlier.

Thank you for your support!

smoothie: proof-of-work uses same hash of Bitcoin, sha256 times 2. You should be able to use most Bitcoin mining tools although we have only tested with cgminer.

Etlase2: there is good reason that checkpoint is still needed in the first place, even when network is matured and one does not care about practical impact of large reorganization of the block chain. Once more detail of the design is made public later this week I can discuss more about that. Although for practical reasons we favor having a more limited time checkpoint such as less than one day behind the latest block to guarantee the safety of large transfers, at the very least during the early stage of the network.

Mining is compatible with Bitcoin mining, but not merge-minable with Bitcoin.

Regarding checkpointing I know it's going to be controversial so I'll try to explain here:

 - Centrally broadcasted checkpointing is not considered part of the immutable core of the protocol, but is needed to make commerce practical as proof-of-stake is somewhat weaker in protection against double spending. Initially it is enforced strongly to protect against malicious powerful miners during the early mining stage. In the future it may be relaxed or replaced with a decentralized version should such algorithm become ready.

 - We consider the checkpointing mechanism a more centralized version of Bitcoin's checkpointing, but not as centralized as SolidCoin's trust node. This is because if the node generating checkpoints fails or disconnects, block chain still continues, but in SolidCoin's case if trust node fails block chain would stop, and that's why they need 10 of those I think. So checkpoints are a centralized form of protection of the block chain, but that doesn't invalidate the purpose of miners/minters as block chain can run on it's own without the protection of checkpoints, albeit with some higher risk.

  - We did fret over this issue during our development, but this is currently the best practical solution we deem ready for release. I am sure we will revisit this topic in the future.

Hope this helps.

I am happy to announce that project ppcoin is now close to beta quality and will be released to public soon.

What are we announcing?

  - First implementation of hybrid proof-of-work/proof-of-stake
  - Long term energy non-dependence (meaning if hashrate drops network is still protected)
  - Long term energy efficiency (assuming the continuation of Moore's law)
  - Proof-of-work mint rate is a function of difficulty (every 16x in difficulty mint rate is halved)
  - Proof-of-stake mint rate is less than 1% annually
  - Centrally broadcasted checkpoint for transaction settlement and defend against 51% attacks

  - No premine
  - No tax
  - Open source
  - Same license term as Bitcoin to help advancing cryptocurrency technology

Schedule

  - Beta release is tentatively scheduled for Aug 19, 2012. In the first release only command-line client is available (ppcoind). Stay tuned.

History

This effort started in October 2011 after some study and appreciation of Nakamoto's breakthrough work. We independently discovered proof-of-stake and worked on redesigning a significant portion of Nakamoto's protocol. The main goal of ppcoin is to validate that energy efficiency is achievable with cryptocurrency. We hope our work would contribute to the advancement of the revolutionary new field.

Update (2012-08-16):

We are busy preparing the final build of the release. Official block chain is tentatively scheduled to start at SUNDAY 2012-08-19 18:00:00 UTC

Disclaimer: This is experimental beta software so play at your own risk. We reserve the right to restart block chain should severe flaws require such actions but we will try our best to avoid such scenario as much as possible.

Release builds will be available for download a few hours before the scheduled block chain start time. Source code and design paper will be available around the same time or earlier.

Thank you for your support!

Update (2012-08-19):
Our paper is now published at http://www.ppcoin.org/.

Release builds have been completed and block chain is on schedule to start at

SUNDAY 2012-08-19 18:00:00 UTC

Release build and source code will be released 5 minutes before block chain start time.

Thank you for your support!

Update:

Release build (including source code) is now available at http://www.ppcoin.org/.
(Sourceforge)

Yes the block chain still generates fine. But people may start feeling insecure if it's getting a lot easier for some entity to launch 51% attack. Thus the network would be under pressure to raise transaction fees to increase hashrate.

Even if people don't think 51% attack would become real, I think if there is a competing altercurrency gaining hashrate users may start migrating to that currency so there is going to be market pressure for bitcoin to raise transaction fee so as to maintain its lead in hashrate.

Transaction fees may need to go up in the long run to maintain network hashing power.
But micropayment is a non-issue since if there is a need to reduce fees for micropayment then there would be micropayment processors forming in the marketplace. You don't have to do micropayments within bitcoin network natively.

I think a better way to ask is how much BTC we need to free ourselves from mundane work and do more important (maybe unprofitable) things for a change 

Earning interest is not the way though. Remember interest bears the risk of losing your principal. So you would likely lose a lot of principal at some point in your lending career.  Overall you cannot expect it to work out like the exponential function, rather more like another job in the marketplace.

Congrats but surely this had already been done in June 2011?