What is PIVX?
Private Transaction and Proof-of-Stake Algorithm Separate this Cryptocurrency from the Rest
PIVX (Private Instant Verified Transaction) was launched in February 2016 as a fork of DASH, primarily due to philosophical differences. While Dash is pushing for mass adoption of cryptocurrency as its primary goal, the PIVX team wanted to work further towards making transactions more private.
The two coins are still very similar from a technical perspective. PIVX has a 60 second block time compared to Dash’s 2.5 minutes, but both also offer “instant” transactions for a nominal fee. Dash calls this InstantSend, while PIVX calls it Swiftx. Both use Masternodes to help secure the network, and both allocate a portion of newly created currency to a governance fund in order to further development.
The two main differences between Dash and PIVX is that PIVX has implemented the Zerocoin protocol, and rewards users through Proof of Stake.
Zerocoin (original paper) is a type of zero-knowledge proof that lets a person prove they have certain information without revealing what that information is. PIVX implements it as a coin-mixing service that breaks the link between sender and receiver, and also allows a user to mask their balance of PIVX.
PIVX calls their implementation zPIV. When you want to send PIVX privately, your wallet automatically mints zPIV coins and deducts an equivalent amount of PIVX. The zPIV is minted in set denominations and mixed with other zPIV of equivalent denominations to obscure which zPIV was sent to which address. The newly minted zPIV is sent to a zPIV address of the receiver and can be converted back into PIVX. Because the zPIV address of both sender and receiver is new, and not linked to any previous transactions, it’s not possible to trace the origin of the zPIV back to the sender or to determine who it was sent to.
Bitcoin, Dash, and many other cryptocurrencies use what’s called a “Proof of Work” reward system. In Proof of Work systems, miners secure the blockchain by creating new blocks and solving a cryptographic math problem, which is the “work”. As a reward, any miner who creates a block successfully receives a monetary reward. While this system reliably secures the network, it requires a lot of computation, and the electricity to power it, which some consider wasteful.
Proof of Stake systems instead reward users who have a certain amount of the currency in their wallet and don’t move it – that’s the “stake”. The more currency you stake, the bigger your reward. PIVX users who stake their currency in their wallet can expect to earn about 5% a year, without doing anything or wasting computing power.
A PIVX user willing to stake 10,000 PIVX is rewarded by becoming a Masternode, which entitles them to a higher reward percentage and the ability to submit and vote on PIVX governance proposals. At the current price getting that much PIVX would cost over $100,000, which is out of reach of most people, but there are over 2,000 PIVX Masternodes online already. The PIVX in a Masternode is still controlled by its owner and can be spent whenever they’d like, but if the total amount of PIVX in a Masternode falls under 10,000 the node stops being a Masternode (but can still get rewarded for staking).
The amount of incentive shared between Masternodes and Staking nodes changes in an effort to make sure too many Masternodes aren’t created. If the system gets too Masternode-heavy, the rewards for running a Masternode are reduced, and if there are too few, the reward is increased. The tipping point is 41.5% – when more than that number of PIVX are locked in Masternodes, the balance shifts to higher rewards for staking.
The Seesaw reward system also makes it somewhat difficult to calculate when you’ll get a reward, as either a Staking node or a Masternode. In general, the more PIVX you have in your wallet the more often you’ll get rewarded. A Masternode with 10,000 PIVX will, on average, get rewarded with about 2 PIVX per day, making around $500 per month (at the current PIVX price). A user who is staking 500 PIVX will get rewarded only once per month with about $24 worth of PIVX.
10% of newly created PIVX from each block goes into a pool used to fund future development. In order to spend that money, a Masternode must submit a proposal to disperse it from the treasury, and the majority of other Masternodes must approve that proposal. Masternodes can also submit proposals to change the PIVX manifesto or to direct changes to the protocol.
PIVX is working on implementing with the Invisible Internet Project (I2P) so that the IP address of every PIVX node will be hidden from its peers by default. Also coming up is a modification that would allow the size of each block to be elastic to improve scalability and an encrypted chat system.
How to Buy PIVX
Unfortunately, PIVX isn’t as easy to purchase as Bitcoin. You can’t buy PIVX with a credit card, so you’ll have to use one of the cryptocurrency exchanges to buy PIVX using Bitcoin.
Buy Bitcoin at Coinbase
To start, if you haven’t already, head over to Coinbase and sign up. Coinbase will let you use a credit card to buy Bitcoin, which is what you’ll be using to purchase PIVX.
Sell Bitcoin for PIVX at Cryptopia
After you’ve purchased Bitcoin, you’ll need to sign up for a cryptocurrency exchange – we recommend Cryptopia. It’s fairly easy to use, has a large selection of coins, and is responsive to customer issues. After you’ve signed up, you’ll send the Bitcoin from Coinbase to Cryptopia. Head to the Cryptopia deposit page, find BTC in the list and click on the Deposit button to get your deposit address. Put that address into the field on Coinbase that lets you send Bitcoin.
After your deposit arrives on Cryptopia, you’ll be able to head to the Cryptopia PIVX/BTC market where you can Buy PIVX using the Bitcoin you deposited.