  NeuCoin is a decentralized peer-to-peer cryptocurrency derived from Sunny
King's Peercoin, which itself was derived from Satoshi Nakamoto's Bitcoin. As
with Peercoin, proof-of-stake replaces proof-of-work as NeuCoin's security
model, effectively replacing the operating costs of Bitcoin miners
(electricity, computers) with the capital costs of holding the currency.
Proof-of-stake also avoids proof-of-work's inherent tendency towards
centralization resulting from competition for coinbase rewards among miners
based on lowest cost electricity and hash power.
  NeuCoin increases security relative to Peercoin and other existing
proof-of-stake currencies in numerous ways, including: (1) incentivizing nodes
to continuously stake coins over time through substantially higher mining
rewards and lower minimum stake age; (2) abandoning the use of coin age in the
mining formula; (3) causing the stake modifier parameter to change over time
for each stake; and (4) utilizing a client that punishes nodes that attempt to
mine on multiple branches with duplicate stakes.
  This paper demonstrates how NeuCoin's proof-of-stake implementation addresses
all commonly raised "nothing at stake" objections to generic proof-of-stake
systems. It also reviews many of the flaws of proof-of-work designs to
highlight the potential for an alternate cryptocurrency that solves these
flaws.
