How BlackCoin (BLK) Started
BlackCoin (BLK) was released in early 2014 and was initially a hybrid of the Proof-of-Work (PoW) and Proof-of-Stake (PoS) algorithms. Via PoW. miners were able to generate freshly minted BlackCoins by cryptographically hashing transactions into a block and adding it to the blockchain. This process of mining blocks maintains and secures the network and is the same mechanism that powers Bitcoin and Litecoin.
Then, the developers turned off PoW mining and BlackCoin became the first pure PoS coin. Unlike other PoS cryptocurrencies, which initially distribute coins via a giveaway, airdrop, or an ICO, the initial distribution of BlackCoin was very fairly distributed. This was done by allowing 7,000 different users to mine coins during the PoW phase which lasted 10,000 blocks.
Problems With Proof-of-Work
PoW requires a large and continually increasing amount of energy to run the network, since mining machines such as computer processing units (CPUs), graphics processing units (GPUs), and application-specific integrated circuits (ASICs) are required to cryptographically hash and organize transactions into blocks. As mining machines are added to a PoW network, the hash rate and difficulty of hashing increases indefinitely.
In the case of Bitcoin, several dollars of electricity are required to confirm a single transaction, resulting in a network-wide power consumption greater than entire nations. This is not environmentally friendly, because the Bitcoin network ends up consuming massive amounts of fossil fuels,releasing tons of carbon dioxide and other pollutants into the atmosphere. This adversely affects the climate of our planet and increases air pollution. Thus, a large PoW network like Bitcoin damages the planet and indirectly leads to death.
An Environment-Friendly Approach
A PoS network, like Blackcoin, uses a tiny amount of energy in comparison to PoW. Users simply have to keep their wallets open and online to maintain and secure the network, avoiding the intensive energy consumption of PoW. Also. PoS results in much faster transaction times of 10 seconds to 1 minute, versus 10 minutes on the Bitcoin network. This faster transaction speed gives traders increased capability to make profits off arbitrage opportunities and market changes since they can move money faster between exchanges. Additionally, users can buy goods and services more quickly with BlackCoin versus Bitcoin.
Low Inflation Rate
Freshly minted BlackCoin is rewarded to users who hold coins in their wallets and are connected to the internet. 1.5 BLK is rewarded per block, producing 739,125 BLK per year, roughly 1% of the total coin supply. This amounts to a low inflation rate, so the price of BlackCoin is barely affected by staking new coins. As time goes on, this inflation rate will decrease as the amount of new coins produced becomes a smaller proportion of the total coin supply. BlackCoin is also one of the first cryptocurrencies to implement a multipool, in which PoW miners collectively mine the most profitable cryptocurrencies and sell them on the exchange for BLK, which helps drive the price of BLK upward.
When BlackCoin was first released its price was about 1 cent, it steadily increased to a peak of 28 cents by June 2014 before swiftly dropping. This behavior is indicative of a pump and dump, which is a common phenomena on cryptocurrency markets fueled by speculators buying large amounts of coin when the price is low and dumping them when price is high. This tends to suck most of the money out of the market.
By mid-2015, the price of BlackCoin reached a low of 1 cent, but began to steadily rise in the following years. In 2017, BlackCoin rapidly increased in value, reaching an all-time high of $1.31 by January 2018. This all time high occurred during the time the entire cryptosphere was in a massive speculative bubble as Bitcoin hit nearly hit an astonishing $20,000. But when the bubble popped, the price of BLK dropped rapidly like almost all other cryptos.
Currently, each BlackCoin is worth 20 cents, and with 76.7 million coins in circulation, this yields a market cap of $15.3 million. This effectively makes BLK’s crypto-platform the 319th highest, which is impressive considering there are thousands of cryptocurrencies. However, nowhere near as high of a rank as BlackCoin used to have in its early years.
Although BlackCoin is not among the top cryptocurrencies to invest in, since there are many cryptos with newer technology and more active markets, it is still important to know about BlackCoin. That’s because, If you are a cryptocurrency enthusiast, you should know that it is the first PoS cryptocurrency and therefore an important milestone in history.