Given the impact of this I believe it should be discussed more.
Thanks.
Chargin.
To get a better idea of what people think about the PoS announcement. The key questions/variables for the announcement are as follows:
1. Should PoS it be implemented at all?
Estimated date:
2. July 28, 2014
Conditions for the change:
3. PoS tests before implementation date go well; and
4. The price of Karma remains below a certain threshold for the July 14-July 28 period.
PoS details:
5. "Interest" of approximately 6.26% per annum (0.5% per 30 days)
6. Holding period of 30 days
7. Coin cap, 92 billion? "until no further coins remain to be discovered"
8. An unknown amount of KarmaShares for holding the coins in the wallet for 30 days.
My thoughts:
1. Yes it should be implemented.
2. It is best to let the people who are implementing the change set this date to make sure it can be done correctly. The sooner it can be done the better.
3. Of course.
4. The decision as to whether the coin goes to PoS should not be based on current or future prices at all.
5. I consider the interest to be similar to inflation, only the holders purchasing power remains the same (all other things being equal). For anyone not holding the currency it would appear as the inflation rate is 6%. The inflation rate should be more in line with developed economies at around 1.5-2.5% per annum.
6. Reasonable.
7. I do not believe there should be a coin market cap. If inflation works up to the market cap it should work beyond it. There is no need to make a two stage process three stages. Either go PoS with no inflation or go PoS and keep inflation. I believe PoS and keep inflation is better.
8. I don't have an issue with a company giving me some of its shares for free. However, Karma LLC should not piggy back on Karma's announcement that it might be going to PoS. The entities should be kept as separate as possible to prevent the value of Karma being pegged against a start-up company. I mean no offense but most start-up companies fail.
Chargin.
[snip]
8. I don't have an issue with a company giving me some of its shares for free. However, Karma LLC should not piggy back on Karma's announcement that it might be going to PoS. The entities should be kept as separate as possible to prevent the value of Karma being pegged against a start-up company.
Sorry, I don't understand. Would you care to explain?
The way Karma price could be pegged against the Karmashares LLC price is you are making a direct way to value something (Karma) which otherwise has no value. Obviously this doesn't matter too much anyways if you always allow people to continue to invest in Karmashares LLC with Karma. I'm sure you know my position on Karmashares LLC vs Karma.
Also, I think we should take this transition opportunity to review everything about the coin, including but not limited to transaction fees, block times and everything that can be changed about a coin. Obviously massive changes like this should only ever be done once, so everything should be reviewed now.
Because I made so many points in my original post, I'll expand on the most important three:Interest being too high.We have to remember that Karma is primarily a currency.
1. I consider the interest to be similar to inflation, only the holders purchasing power remains the same (all other things being equal). For anyone not holding the currency it would appear as if the inflation rate is over 6%. The inflation rate should be more in line with developed economies currencies at around 1.5-2.5% per annum. People perceive a currency with a high level of inflation as not stable because it doesn't hold value.
Of course I'm taking an extremely long term view here (decades) because the main price driver in all crytocuncies for at least the next ten years will be speculation because Karma has no value unless people give it one, which is also true about fiat currencies. $100 isn't worth anything unless I can swap it with somebody for something. It will always be this way for crpytocurrencies because there is no centralised government increasing and decreasing the flow of the currency to keep it stable. However over time as more people assign a value to cryptocurrencies the more stable they will become against fiat currencies, good and services. At this time speculation will decrease because other investments will have higher possible returns, speculators will over time sell out to people who are using the coin as a currency.
2. If the interest rate is too high not enough Karma will be kept on exchanges. This may not sound like an issue for speculators because it means it is far more likely the currency will increase in value (less to buy on the sell side to push up the price) however it will also make the currency less stable...less like a currency.
3. If the interest rate is too high it may encourage bad practices by exchanges. Exchanges might keep funds in less secure wallets to try to take advantage of the interest.
The decision shouldn't be based on price.It just doesn't look good if the decision is being made on price. The decision should be made based on what will be the best for Karma in decades to come. Ok, I just wanted to say this again not explain it.
There should be no coin cap.If inflation works up to the "market cap" it should work beyond it. There is no need to make a two stage process three stages. Either go PoS with no inflation or go PoS and keep inflation. I believe PoS and keep inflation is better because it is more realistic compared to fiat currencies. However this point only applies if the interest is below 3%. Also if the inflation is removed the network may lose some of its security (depending on how exactly the PoS works).
The main advantages of PoS are:1. The network is more secure;
2. The network costs far less to run (I'd call "saving the planet" good karma); and
3. It encourages people to take their Karma off exchanges unless they plan on selling it in the near future. There is over 2 billion Karma on the market of a single exchange at the moment, probably billions more not on the market just sitting in the exchanges accounts. I don't like concentrations of Karma because it won't take much in the wrong hands to crash its price.
The disadvantages of going to PoS are:1. It could be completely screwed up, as per my limited understanding of the transition process, moving to PoS would be almost like 51% attacking Karma ourselves. We are doubling the amount of Karma and saying half of it is worthless now because these guys say so.
2. People with mining rigs that don't want to buy coins can no longer mine for them. People can mine other coins and then purchase Karma however some people will be unwilling to take this extra step. Mining is becoming harder and harder for individuals so I think this point will become less valid over time.
I think the advantages are greater than the disadvantages. I'm willing to risk losing the value of a few Karma now if things go wrong to see Karma survive long into the future.
Chargin.
.
