BLOCK Issue 4

“ Prizm is the
only concept
that offers
blockchain on
one side and
coin generation
on the other ”
HERE’S WHAT INVESTORS SHOULD PAY
ATTENTION TO:
This cryptocurrency ownership is direct
access to the encrypted blockchain database,
directly without intermediaries in the
form of services that provide two-factor
authentication and/or remote generation
of private keys. You can consider yourself
the owner of a cryptocurrency only if you
personally contact blockchain without
intermediaries, if this is not the case, then the
safety of assets is transferred to services and
exchanges, this is an additional risk that must
be taken into account.
Let’s talk about the fairness of the
distribution of coins that many
coins declare – decentralization.
If coin mining parameters
are possible, those who have
concentrated mining capacities
win, and a technological centre
of production is being formed,
as has happened with bitcoin. In
order to generate a new coin in
any cryptocurrency, such as when
mining bitcoin for example, you
need to pick up pairs of primes
thanks to which a block is generated, i.e. if you
generated a new block in the blockchain, then
the genesis block gives you coins, sending
them to your address.
As with all cryptocurrencies, in order to
generate a new coin, you need to support
the network. They are not miners engaged
in mining bitcoins as most imagine, but are
instead generating blocks on the blockchain
and getting rewarded in the form of Satoshi
for this. In Bitcoin, the genesis of the block
spells out how many bitcoins it should
give per block and in what period of time.
Depending on the complexity, it will give
bitcoins. The same thing occurs with all
cryptocurrencies.
This single concept leads to centralization.
Because at the initial stage there are a lot
of miners, and since it is easy to mine, it is
relatively straightforward to generate blocks
and to maintain a network. Accordingly, anyone
can mine, there are many miners and because
of the large number of them they keep the
network secure. This is the case with both the
POW concept and the POS concept. At POW, if
the complexity of the network increases, then
more powerful equipment is needed, into which
you need to invest a lot of money in order to
generate new blockchain blocks. Accordingly,
competition decreases, since in order to create
blocks you need a substantial amount of
hardware. The same goes for the classic POS
concept. To generate new blocks you need to
have coins. The more coins you have, the more
blocks you forge and the more blocks you forge,
the more coins you are given.
Accordingly, you become stronger and stronger.
It becomes harder to compete. And if you do
not sell your coins to anyone, you will result in
concentrating the entire network on yourself.
And because of this, all blockchain networks
that work on this principle strive to shift from
decentralization to centralization. So, the more
processing power for POW and the more coins
on POS lead towards centralization or increased
control over this system.
In Prizm everything is fundamentally
different: the issue of coins is not related to
the generation of blocks in the blockchain. In
fact, forgers are enthusiasts who maintain
the network in a healthy state and do not
generate new coins. They simply receive a
fixed commission from transactions that
were recorded in the block they created. And
the generation of coins is made to all users
at the same time and this just leads to even
greater decentralization. It is impossible to
accumulate coins in one place with a margin
of 50%. The larger the network of users grows,
the more it spreads.
58 | #AIBCsummit Issue 4