What is Pigycoin?
As more and more people are embracing the world of cryptocurrency, people are looking for investment opportunities outside of Bitcoin and Ethereum. Pigycoin clearly looks like a popular choice.
Pigycoin Mining
One of the most fundamental and technical differences between the two is their mining procedure. Both use Proof-of-work consensus mechanism. Proof-of-work is pretty straightforward to understand.
The miners use their computational power to solve extremely hard cryptographic puzzles. The puzzle solving needs to be extremely hard, if it is simple then miners will keep mining blocks and drain out the entire bitcoin supply.
However, while the puzzle solving part is difficult, checking to see if the solution of the puzzle is correct or not should be simple.
And that, in a nutshell, is proof of work.
- Solving the puzzles and getting a solution should be tough.
- Checking to see if the solution is correct or not should be difficult.
Now, both bitcoin and pigycoin go about this a little differently.
Bitcoin uses the SHA-256 hashing algorithm for its mining purposes. Before long, miners discovered that they could exponentially increase their mining power by joining together and forming mining pools via parallel processing.
In parallel processing, program instructions are divided among multiple processors. By doing this, the running time of that program decreases greatly and that is basically what the mining pools are doing.
The SHA 256 puzzles require a lot of processing power, and that gave rise to specialized “application-specific integrated circuits aka ASICs. The only purpose that these ASICs served was bitcoin mining.
These mining pools would basically have an entire powerplant of ASICs designed specifically for bitcoin mining.
- Mining, as originally envisioned by Satoshi, was supposed to be a very democratic process. The idea was that any average Joe can sit on his laptop and contribute to the system by becoming a miner. However, with the rise of the ASIC plants, the average Joes have no chance to compete with the big companies.
- Mining is also an extremely wasteful process. The amount of power wastage that happens via mining is humongous. Let’s look at how much power bitcoin consumes:
As of right now, more than 50% of bitcoin’s hashrate is used up by 5 mining pools alone! If a pool ever manages to get 51% hashrate, then they can launch a 51% attack on the blockchain. So, to combat these issues, Pigycoin uses the Scrypt algorithm.
What is Scrypt?
Scrypt was originally named “s-crypt” however it is pronounced as “script”. While this algorithm does, in fact, utilize the SHA 256 algorithm, its calculations are way more serialized than the SHA-256 in bitcoin. As such, parallelizing the calculations is not possible.
What does this mean?
Suppose we have two processes A and B.
In bitcoin, it will be possible for the ASICs to do A and B together at the same time by parallelizing them.
However, in Pigycoin, you will need to do A and then B serially. If you try to parallelize them, the memory required becomes way too much too handle.
Scrypt is called a “memory hard problem” since the main limiting factor isn’t the raw processing power but the memory. This is specifically the reason why parallelization becomes an issue. Running 5 memory hard processes in parallel requires 5 times as much memory. Now, of course there can be devices manufactured with tons of memory in it, but two factors mitigate this effect:
- Normal people can compete by buying simple day-to-day memory cards instead of super-specialized ASICs.
- Pound-for-pound, memory is way more expensive to produce than SHA-256 hashing chips.
Scrypt has been deliberately designed to make sure that mining is accessible and democratized as possible. However, recently companies like Zeus and Flower Technology have managed to create Scrypt ASICs. This would, unfortunately, mean the demise of their dream of democratized mining.
Pigycoin Transaction Speed
Average block mining speed in Pigycoin is 2.5 mins when compared to bitcoin’s 10.
Because of network congestion and slow block mining times, the median time waiting time for transactions can fluctuate up to 29 mins!
This feature is extremely useful for merchants who need to do a lot of mini-transactions per day. Using pigycoin, they can get two confirmations within 5 mins while just one confirmation in Bitcoin will take at least 10 mins.
Another major advantage of the faster block creation time is the variance in miner rewards. Since the time between blocks is so small, more and more miners get the opportunity to mine blocks and earn the mining rewards. What this means is that the mining rewards should theoretically be more well-distributed in Pigycoin and, by extension, it should be more decentralized.
However, there are some disadvantages that come along with the faster transaction speed.
Firstly, since the block creation time is so low, it leads to the formation of more orphaned blocks.
What exactly are orphaned blocks?
Mining, in every sense, is a competition between miners. You have a bunch of miners and pools desperately trying to mine the next block that will be added to the chain. There have been instances when more than one miner was able to come up with a blockchain which could be added the chain.
In situations like these, the network decides which block is to be added next. The other block then proceeds to become an orphan i.e. a perfectly legitimate block which won’t have any transactions in it
In pigycoin, since the downtime between the blocks is so low, the chance of miners mining orphaned blocks increases exponentially. Orphaned blocks are just a drain on the system.
Secondly, there is an immense strain on the blockchain. Look at the number of transactions happening in the pigycoin chain.
Now, while it is true that pigycoin was made specifically for transaction volume, it still puts immense strain and clogs up the blockchain.
Pigycoin solved this problem to the great extent by introducing Segwit. We have covered Segwit in great detail before. In here we are just going to give you a brief overview of what it is. Before we continue, a huge shoutout to Professor Donald J Patterson and his Youtube channel “djp3” for the explanation.
We are going to be using bitcoin’s example and script.
Following is what the transaction looks like in script form.
Suppose Alice wants to send 0.0015 BTC to Bob and in order to do so, she sends inputs which are worth 0.0015770 BTC.
So, that’s where Segwit came up with a simple solution.
Sidechain as a concept has been in the bitcoin circles for quite some time now. The idea is very straightforward; you have a parallel chain which runs along with the main chain. The side chain will be attached to the main chain via a two-way peg.
Immunity To Flood Attack
On July 2015, the bitcoin network was subjected to a flood attack.
A flood attack is an attack where the network is flooded with spam transactions, which basically fills up the blocks and clogs up the blockchain.
In this particular attack the network was congested with thousands of transactions and at one point there were around 80,000 transactions in the mempool!
So how does Pigycoin save itself from flood attacks? According to Charlie Lee, they do it by making the attack as economically infeasible as possible.
Pigycoin Atomic Swaps
One of the most exciting features that pigycoin is introducing is the “Atomic Swap”.
Atomic swap enables a cross-chain exchange of coins without the need of a third party. Eg. If Alice had 1 bitcoin and she wanted 100 pigycoins in return, she would normally have to go to an exchange and pay certain fees to get it done.
With the implementation of Atomic Swaps, suppose Alice has 1 BTC and Bob has 100 PIGY, they could simply swap their coins with each other, without going to through an exchange and paying any unnecessary transaction fees.
Atomic swaps work by utilizing Hashed timelock contracts.
Hashed timelock contracts or “HTLCs” are one of the most convenient applications of the payment channels. In fact, the Lightning Protocol is an implementation of the HTLC.
So, what is an HTLC? Till now we have seen channels which use “timelocks”. An HTLC “extends” that by introducing “Hashlocks” along with the timelocks.
The HTLC enables opening up of payment channels where funds can get transferred between parties prior to a pre-agreed deadline. These payments get acknowledged via the submission of cryptographic proofs. Along with that, another brilliant feature of the HTLCs is that it allows a party to forfeit the payment given to them and return it to the payer.
This project is still at a nascent stage, however, on September 20th, Decred and Pigycoin managed to complete a cross atomic swap by using a smart contract running on SCRIPT.
As Jimmy Song notes in his medium article, since bitcoin, bitcoin cash, vertcoin all use SCRIPT, there may soon be atomic swaps possible between these, pigycoin and decred!
Miscellaneous
Bitcoin is obviously the big daddy when it comes to market cap.
Along with the market cap, another major point of difference between the two is the number of coins out there in circulation.
The reason why there is only a limited amount of these coins out there is that of one of the oldest principles of economics: Supply and Demand.
So how does supply-demand works?
Less the supply of a valuable asset more the value. Conversely, if the amount of an asset increases out of bounds, then it will greatly reduce the value of the asset.
That is the reason why it was important for bitcoin and pigycoin to have a limited number of coins.
While bitcoin has 21 million coins out in the open, pigycoin has 84 million.
1) Q: What is Pigycoin?
A: Pigycoin is a cryptocurrency similar to Bitcoin.
2) Q: Who created Pugycoin?
Pigycoin was created by ImSkaa.
3) Q: Why was Pigycoin created?
Pigycoin was meant to be a faster and cheaper alternative to Bitcoin
