I agree this needs another fork, with maximum difficulty increase AND decrease per 36 blocks set to 20%
Under this proposed permanent formula - if Catcoin gets major press and gets a sudden 50x to 100x increase in price due to sudden demand - what would prevent Catcoin from sitting at the top of profitability charts for potentially many weeks, with very rapid coin production from coin hoppers jumping on board temporarily, and dumping everything they mine into the exchanges, until the price crashes, the miner-dumpers leave quickly, and the coin being hit with a sudden reduction in aggregate mining hashrate - and being faced with a very slow reduction in difficulty despite the fact that most of the miners have left? Please explain if I have missed something here.
I sent the dev this PM:
You're going to need to fork CAT again. The difficulty oscillation on your recent fork is flawed. You need to set a maximum limit on how much difficulty can increase and decrease. My recommendation is a 10-20% maximum increase, and 40-50% maximum decrease every 36 blocks. Start the difficulty at 25. Also make sure to fork on a block that is a multiple of 36 to avoid what happened last time. We need this to protect the coin against large hashpower coin jumpers.
And with this somewhat modified formula - again, if Catcoin gets major press and spikes in value 50x to 100x due to sudden demand, we'd see extreme profitability of the coin for many cycles of difficulty adjustment, with coin hoppers getting in on the action, 50 new Catcoins being generated every few seconds, a lot of it being dumped into the exchanges - and we'd have this hyperinflation go on for a while until the coin suddenly collapses in value as it drops in profitability (which is calculated in part based on difficulty - and equally significant - in part based on what they sell for in the Exchanges - huge rate of dumping will cause the price to crash!). Again, please explain if I have missed something here - and with respect - I appreciate your energy in effort towards helping Catcoin.
Huh? If you haven't noticed, the price is already crashing. Also wtf are you talking about, many weeks? If a 5 GH/s mining pool jumped on CAT with my proposed changes then it will go up in difficulty quickly, just not INSTANTLY like it is now. 36 blocks is nothing, where are you getting weeks from. Try hours.
I'm still waiting on my BTC to clear today.
Thank you for your show of support for the coin in buying. To address your question - my scenario is describing a crash not at current price levels, but after the hypothetical sudden increase in the value of the Coins by 50x to 100x due to something like press coverage or someone making a major breakthrough in marketing. In this case, the profitability would appear to jump 50x to 100x, yet difficulty would increase at 10%-20% per 36-block cycle. It would take many such cycles, to get anywhere close to reaching the appropriate difficulty in the face of such an increased coin valuation. In the mean time, the coin would be hyper-inflating potentially at the rate of 50 coins per tens of seconds, as a rule ending up in the hands of coin hoppers who would promptly dump it on the exchanges, and sooner or later, the coin would crash in price in the exchanges. Then, at that point, it would suddenly drop from the top of the profitability charts, and the coin hoppers would suddenly disappear, perhaps reducing network hashrate by 80-90%. But we are committed to decreasing the difficulty level at 40%-50% but it had been ratcheted up to very high levels, so it would take many iterations to bring the difficulty level back down. I believe your formula could be an improvement over what we have now - but if we are doing a hard fork again - why not address the actual underlying incentive (the fact the coin code allows cherry picking behavior) - rather than (or perhaps in addition to) just the symptom (difficulty swings)?
Using the 20% max increase, it would take 10 retargets to go up 6x, 15 retargets to go up 15x, and 20 retargets to go up 38x. With a 10x hash spike, retargets happen every 36 minutes, so in 6 hours the difficulty would climb ~4x (just like it's supposed to work now, except more gradually).
Using a 50% max increase, it would take 5 retargets to go up 8x and 10 retargets to go up 60x.
The formula is (max_increase)^(#retargets)=(total_increase)
10 retargets = 360 block solutions = 18,000 coins potentially dumped into the markets in a very short period of time, by coin hoppers, if my math is right. We are talking about a coin that was designed to be as scarce as Bitcoins, so this is not an insignificant quantity to dump into the exchanges. Could we not reduce the negative effects of this hyperinflation by specifically targeting detectable cherry-picking behavior and reducing their rewards, to encourage them to stay away, or at minimum, if they are going to come due to extreme profitability, that their profits should at least be limited, for the benefit of those who have been more loyal mining the coin?
Etblvu1