O Coin Needs Proof of Work for Trust, and Layer 2 for Scale

O Coin aims to be a transactional currency people use worldwide, with its value tied to the local price of one liter of potable water. This reference rate is published on the blockchain, which can be followed or ignored by users. However, moving away from the reference rate has economic consequences. Those who stay aligned are rewarded, while those who deviate enrich those who remain stable.

O Coin's code is an open-source Bitcoin Core fork, but it requires improvements to handle the global transactional currency's volume. Understanding why Bitcoin was built slow on purpose is crucial to solving this challenge. Proof of Work was a security decision, as it made the network resistant to 51% attacks and denial-of-service attempts.

However, it also limits the network's capacity. Bitcoin's block interval of ten minutes allows time for blocks to propagate across the network, reducing the likelihood of competing blocks and improving security. Block size is a trade-off, as larger blocks require more bandwidth, CPU, storage, and memory. For a global transactional currency like O Coin, the target capacity is much higher than Bitcoin's current throughput.

Hundreds of thousands of transactions per second, potentially approaching one million at peak times, should be supported. Therefore, O Coin must find a solution that balances security with scalability to meet the demands of a global transactional currency.