Topic: A new kind of token minting : "Proof of Use" (Read 132 times)

Hi. I'm the creator of Catether, and I am about to launch my coin, tomorrow evening at 10PM UTC.

I also created a new kind of "Proof" to create token, "Proof of Use". It's still very experimental, but someone HAD to test it.
If you want to take a look at the announcement thread ==> https://bitcointalksearch.org/topic/annno-ico-0xcate-proof-of-work-erc20-token-refund-your-gas-with-cates-3539559

Main idea is, each time you make a transaction, it mints 1 token. It could be more (or less), but the main idea is that you mint enough tokens, so that it covers the fees from the initial transaction. In the case of Catether, the Transfer function takes about 42 000 gas to be executed, and each time you successfully confirm a transaction, you get 1 token. So, basically, the Ethereum platform itself is selling 1 token for 42 000 gas. It's in the code, so, you can't change that.

What do you guys think of this feature ? Currently, you can only commit around 10 transactions per second on Ethereum. At the end of the year, it would thus create a maximum of 350 million tokens per day, which is about 10% of the mining emmission rate.
If Ethereum scales, "Proof of use" will take over "Proof of work" in terms of emmission rate. As long as the number of transactions doesn't grow more than 25% per year, we're safe from infinite inflation, and the inflation rate will converge to 0%/year at some point.

It doesn't require hardware, not it requires any form of initial investment to create tokens. Anyone can do it, it works even if you make empty transactions (you still get credited for sending 0 tokens). But since it always costs gas to do so, you can't just spam a shitload of transactions and wait for free profit: there are limitations both in terms of tx/s, and GWei/tx. If you spam transactions on the network, you'll make gas price surge upwards, and will end up wasting Ether in useless transactions.

However, if you manage to make a few transactions (not to much, just what it takes to fill blocks to 100%), you will actually make money with this system. Not a lot, but it'd be similar to what you can earn by mining. except that, once again, you don't need hardware for that. Anyone can.


what do you think about this system? Will it work?

We will launch Catether on the Mainnet tomorrow. It's a Live-experiment :3