• In the traditional "Proof of Work" model used by the
  majority of cryptocurrencies, network security is
  ensured by participants performing "work". They use
  their resources (calculation/processing time) to
  reconcile transactions with double costs and in order to
  impose extraordinary costs on those who attempt to
  collapse transactions. For this work, participants are
  awarded with PZM, and their frequency and amount
  vary depending on the working parameters of the
  cryptocurrency. This process is known as mining. The
  frequency of block generation, which determines each
  available reward for mining cryptocurrencies, as a rule,
  should remain constant.

As a result, the labor intensity of the work required to obtain
rewards should increase as the network becomes more
efficient. As the Proof of Work network develops, the
individual user has less incentive to support the network,
since their potential reward is distributed among more
colleagues. In search of profitability miners continue to
invest resources in the form of specialized, patented
equipment that requires significant investment and high
current energy costs. Over time, the network becomes
more centralized as smaller partners (those who can do less
work) drop out or pool their resources into pools. The
Creator of bitcoin Satoshi Nakamoto, intended bitcoin
network to be completely decentralized. But no one could
predict that the incentives provided by Proof of Work
systems would lead to the centralization of the mining
process. This leads to potential vulnerabilities.

GHash. The bitcoin IO pool has reached 51% of bitcoin mining power in the past, and the top five bitcoin mining pools
make up 70% of the hashing power of the network. The concept of decentralization is at risk of total loss. In the Proof of
Stake model used by Prizm, network security is regulated by partners who have a stake in the network.

The incentives provided by this algorithm are not conducive to centralization as Proof of Work algorithms,and data
show that the Prizm network remains highly decentralized since its inception: a large (and growing) number of unique
accounts contributing blocks to the network, and five top accounts generate 35% of the total number of blocks.

• Prizm uses a system in which each “coin” in the account can be
  considered as a miniature mining farm. The more coins are contained
  in the account, the more the account is likely to receive the right to
  create a block. The total "reward" received as a result of creating the
  block is the amount of commissions for transactions located inside the
  block. PRIZM does not create any new coins as a result of creating
  blocks. PRIZM does not create any new coins as a result of building
  blocks. PZM redistribution occurs as a result of block generators
  receiving transaction fees, so the term "forging" is used in this context
  instead of "mining" and implies to "create relationships or new
  conditions”. Subsequent blocks are generated based on verifiable,
  unique, and almost unpredictable information from the previous block.
  Blocks are linked by virtue of these links, creating a chain of blocks
  (and transactions) that can be traced back to the Genesis block. Block
  generation time is approximately 59 seconds, but changes in the
  probabilities have led to the fact that the average generation time of
  the block can be 80 seconds, there are longer intervals of blocks. The
  security of the Blockchain is always set in the Proof-of-Stake system.

The basic principles applying to the Prizm Proof of Stake algorithm:

• The cumulative complexity value is stored as a parameter in each block, and each subsequent block
  receives its new "complexity" from the value of the previous block. In the case of ambiguity, the network
  achieves consensus by choosing a block or chain fragment with the highest cumulative complexity.

• In order for account holders not to move their funds from one account to another as a means of
  manipulating in order to be able to generate blocks, coins must be stationary within the account for 1,440
  blocks before they can contribute to the block generation process. Coins that meet this criterion
  contribute to an efficient account balance, and that balance is used to determine the probability of
  forging.

• To prevent an attacker from creating a new chain all the way from the Genesis block, the network only
  allows the restructuring of the chain of 720 blocks located behind the current block. Any block below this
  threshold shall be rejected. This move threshold can be considered as the only fixed PZM checkpoint.

• Due to the extremely low probability that any account will take over the Blockchain management by
  creating its own chain of blocks, transactions are considered safe if they are encoded into a block that is
  located 10 blocks behind the current block.

Comparsion with Peercoin Proof of Stake

Peercoin uses the setting of the age of the coin as part of the algorithm of
the mining probability. In this system, the longer your Peercoins have been
on your account (up to 90 days), the more power (coin age) they have to
create a block. The act of "Meeting" the block requires the consumption of
the dignity of the coin age, and the network determines the consensus by
selecting the chain with the greatest total consumed coin age. When the
Peercoin blocks are separated, the consumed coin age is returned back to
the original block account.

As a result, the cost to attack the Peercoin network is low, since the
intruders can continue to try to generate blocks (called grinding the stake)
until they are successful. Peercoin minimizes these and other risks by
centrally publishing blockchain checkpoints several times a day to "freeze"
the blockchain and block transactions. Prizm does not use the coin age as
part of the forging algorithm. The chance of creating a block by any account
depends only on its current balance (which is the advantage of each
account), the time since the last block (which is shared by all forging
accounts) and the base target value (which is also common for all accounts).

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