The Reddcoin Network
Unlike Bitcoin, which uses a so called Proof of Work algorithm that requires its ‘miners’ to spend vast resources to secure the network, the Reddcoin network instead uses a Proof of Stake algorithm. Where Proof of Work uses expended computing power as a means to facilitate trust in the network, a Proof of Stake algorithm has its users show ownership of coins in order to sign blocks of transactions. Proof of Stake, like Bitcoin’s Proof of Work, ensures the integrity of the network because, in both networks, the stakers or miners are encouraged to only accept valid transactions through the promise of rewards.
The greatest advantage of a proof of stake system is that it requires far less computational power which results in far lower use of energy. Where Bitcoin transactions are now significantly impacting the environment through their tremendous requirement for electricity, coins that use a Proof of Stake algorithm are far more environmentally friendly. Furthermore, where mining requires sophisticated hardware and thereby limits its feasibility to only the largest players with the most funds available, Proof of Stake requires limited resources to stake. This opens up the possibility of earning rewards for securing networks running a Proof of Stake algorithm to all users and investors. Because of this, earning Reddcoin is not only possible by receiving tips for content that you create, but simply owning the currency and using them to further secure the network will also earn you coins! Like interest in the bank, ownership of Reddcoin can provide you with more Reddcoin over time!