Things to know about staking with Genstake.
Tips for staking the coins you buy:
Withdraw in sets of 100. So if you've bought 1000 genstake and you withdraw them in sets of 100, then your wallet will have 10 stacks of 100 coins in your wallet. That way when you stake, you will only lose the weight of 100 coins instead of the whole 1000 coins.
When you stake, if your coins have more than 8 hours of age on them, Genstake will slowly break them down or build them up, targeting a stack size of 100 coins. Because of this, breaking up coins into amounts smaller than 100 coins in a single address wont be very effective, as Genstake will just combine them again into stacks of 100 when they do stake.
Think of it like this:
You have $2000 cash in your wallet. I mean a real, physical wallet here, sitting in your back pocket. Well there's no such thing as a $2000 bill. That $2000 is made up of $100, $50, $20, etc. bills, (adjust as needed depending on how the denominations are in your country). Things work much the same in your digital wallet, except you can have 'bills' of any size. If you have a stack of 100 GEN, and you want to send Joe 35 GEN, you have to send the whole 100 GEN - but what happens is that you split it into a new a stack of 35 GEN that you send to Joe, and a new stack of 65 GEN that you send back to yourself.
All coins work this way, even bitcoin. That's where change addresses come from.
Anyway, for those of you new to staking, or unfamiliar with the mechanics of it, your hash on the network is called 'weight'. The more weight you have compared to the network weight, the more likely you are to make a new block. It's a little like a lottery where each point of 'weight' you have is a ticket for a chance to win the next block.
So where does the weight come from? Well, one coin, held for one day without moving, has 1 weight. Two coins, held for one day without moving, has 2 weight. one coin, held for two days without moving, has 2 weight.
So what about minimum age? Well, the network still considers a coin 'active' until it reaches the minimum age. After it reaches the minimum age, it is considered 'held' and that's when it starts building 'weight'.
Ok, so what happens when you stake? When your coins stake, your weight is spent on producing the coin. The way that weight is spent is, in the process of staking, your wallet moves those coins into a new stack, along with the 20 new coins you staked. The thing is, your wallet can't just move the one coin that 'won the lottery' if you will. It has to move the entire stack it was in too. That's true if it was in a stack of 1000 coins or 100 coins, or even just 5 coins. The whole stack has to move, and the weight of the entire stack is spent producing the new block of 20 coins.
This is how staking works for every coin, only in all other coins the block reward is a small % of the number of coins in that stack. In Genstake, it's a fixed amount of 20 coins.
Alright, so why not break everything down to 1 coin? There's a catch to having small stacks of coins in your wallet. Your wallet, and your computer for that matter, can probably only deal with having about 1000-2000 stacks of coins before it starts having problems. Also, sending a large number of stacks in a single transaction costs a lot more in transaction fees. These are important considerations, and part of the reason why people that have a smaller number of coins will have an advantage over time - because their wallets can handle having their coins broken down into smaller pieces. Over time, larger holders will have to spread out their coins across multiple wallets if they want to be able to continue to compete with smaller holders.
Another reason that people with fewer coins will have an advantage over time is because people with lots of weight will shed their weight much more quickly than people with fewer coins in smaller stacks. So while people with more coins will stake more blocks, and thus more coins overall in the long run, people with fewer coins will stake a much higher proportion of coins than one might expect with their small % of the coinbase. This is why people with 100 coins are seeing their holdings grow at a much faster rate than the coinbase is growing: because their weight over time is giving them an advantage.
There's a lot more to the staking system. Things like people sending or receiving large numbers of coins on the network spends the weight of those coins, reducing the overall network weight and making it much easier for everyone else to stake.
Because of the design of this system, the coinbase will naturally spread out over time, and we should see the distribution of coins broaden over time. The more people that get involved, the more people we get staking, the broader that the distribution of coins will become, and the more stable and broad the network will be.
It's important to understand that because POS staking is open to everyone, it is absolutely decentralized. Any wallet holding coins, anywhere in the world, can stake the next block. And there's no such thing as ASIC's for staking, the only things that can produce POS blocks are the coins themselves. In pure POS there is some risk of a 51% attack by someone that has enough coins and has left their coins offline long enough that they have enough weight to harm the network, but because POW is and always will be a part of Genstake the risk of such a thing is greatly reduced, and phenomenally more difficult to perform.
I hope this helps people that are interested understand a little better what's going on in Genstake.
