1.1 Overview of Blockchain and Cryptocurrencies

Blockchain technology has driven innovation across various industries such as finance, supply chain management, healthcare, and energy since the advent of Bitcoin in 2009. Based on distributed ledger technology (DLT), blockchain enables direct peer-to-peer transactions without intermediaries, offering high levels of security, transparency, and immutability. These features make blockchain a promising alternative to traditional centralized systems, overcoming their limitations and enhancing trust and efficiency.

However, despite the advancements in blockchain technology, issues such as scalability, interoperability, and sustainability still exist. Prominent public blockchains like Bitcoin and Ethereum have a very limited number of transactions per second (TPS) that they can process.

Additionally, the lack of interoperability among various blockchain platforms and the sustainability issues associated with the traditional Proof of Work (PoW) consensus algorithm, such as significant energy consumption and environmental concerns, present ongoing challenges. To address these issues, the blockchain industry is exploring various technological innovations. Solutions like sharding, Layer-2, and Layer-3 aim to enhance scalability, while the development of cross-chain protocols seeks to improve interoperability. Furthermore, the adoption of energy-efficient consensus algorithms such as Proof of Stake (PoS) and Delegated Proof of Stake (DPoS) is being pursued to achieve greater sustainability.

This whitepaper aims to provide a brief overview of how blockchain works and its consensus algorithms, followed by an introduction to the new blockchain solution proposed by the PEM project.