Can someone explain to me how PoS works? - page 2.

Daedelus

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It sounds like you're back peddling and trying to re frame our discussion.

This is where we began:

Quote from: spartak_t on May 07, 2015, 07:09:28 AM

Quote from: Troonetpt on May 07, 2015, 05:39:28 AM

NXT and Qora don't have interest, they only earn transaction fee. It more like all bitcoin was mined and the miner will only earn transaction fee.
Interest is totally wrong, the infinite amount coins make is worthless.

I think you are wrong. If a coin is with let's say 20M in supply and interest is 3%/year only about 610k coins/year will be created. This is like holding your savings in bank + faster and more secured network.

Interest (inflating the coin supply) has been the theme. Troopnetpt thinks creating coins constantly is wrong, you disagreed. I agree with Troopnetpt.

Do you still think 3% is the same as getting 3% in a bank? I've shown how it isn't but you glossed over it.

If a coin has good fundamentals, development and adoption it with probably do well. It isn't unique to POS or dependent on inflation. So why is having an extra 3% number of a coin (while each coin is worth a corresponding % less) important? Logically, you must think the inflation is responsible. But this goes against economics (and maths on a more basic level as you have a larger denominator when dividing the market cap by supply).

spartak_t

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Quote from: Daedelus on May 08, 2015, 10:44:04 AM

No.

Please define what you mean when you say POS

Well... will try to be more clear with what I mean. if we talk about PoS and only it's financial side (you continue to look on it as inflation, but PoS is really much more than that), I consider it as profit if the coin has good fundamentals, development and above all - constant work on adoption.

Daedelus

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Quote from: spartak_t on May 08, 2015, 10:34:39 AM

Quote from: Daedelus on May 08, 2015, 10:29:10 AM

FIFY. Strange quirk you have.

And again, our discussion was about ~~inflation~~ PoS as a source of profit. You say it is, I and economics say it has the opposite effect and erodes value (even small amounts due to compounding).

Daedelus,

I can do that too you know, but I want to ask you something as well. Are you related to barabbas? Grin

No.

Please define what you mean when you say POS

spartak_t

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Quote from: Daedelus on May 08, 2015, 10:29:10 AM

FIFY. Strange quirk you have.

And again, our discussion was about ~~inflation~~ PoS as a source of profit. You say it is, I and economics say it has the opposite effect and erodes value (even small amounts due to compounding).

Daedelus,

I can do that too you know, but I want to ask you something as well. Are you related to barabbas? Grin

Daedelus

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Quote from: spartak_t on May 08, 2015, 09:59:48 AM

This discussion leads to nowhere, because we both have different opinions about ~~PoS~~ crypto coin supply inflation. Probably it will be good if more people express their opinions about ~~PoS~~ crypto coin supply inflation and if it can be compared with real life inflation.

FIFY. Strange quirk you have.

And again, our discussion was about inflation as a source of profit. You say it is, I and economics say it has the opposite effect and erodes value (even small amounts due to compounding).

spartak_t

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This discussion leads to nowhere, because we both have different opinions about PoS. Probably it will be good if more people express their opinions about PoS and if it can be compared with real life inflation.

Daedelus

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Quote from: spartak_t on May 08, 2015, 09:38:46 AM

I simply can't provide any evidences, because lately crypto-world is a place filled with so many scammers.

Does not follow.

Quote

P.S. And in my eyes, I will continue to think that ~~PoS~~ interest* is more profit than inflation.

FIFY.

Basic economics disagrees with you.

*coin supply inflation

spartak_t

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Daedelus,

I simply can't provide any evidences, because lately crypto-world is a place filled with so many scammers. In some romantic way, I think that this could be changed, but feel free to accept my opinion as yada-yada.

P.S. And in my eyes, I will continue to think that PoS is more profit than inflation.

Daedelus

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Quote from: spartak_t on May 08, 2015, 09:19:03 AM

BitJohn, Sylon,

We are dealing with inflation here. Grin

We aren't. We are dealing with your claims that inflation is a source of wealth (inflation = profit).

Please point to your posts that provide evidence for this.

3% will erode value at the same rate, regardless of the number it is applied to; tens, billions or trillions. That is how percentages work (3 in each 100). The dilution to the stake you hold is at the same rate, why would it be different if you had a different amount? If it isn't, why make the comparison you did above with US GDP?

I have noticed you use POS when are referring to inflation, interesting.

spartak_t

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BitJohn, Sylon,

We are dealing with inflation here. Grin

Sylon

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You should take a look at this video. It's very well explained.

https://www.youtube.com/watch?v=L1HqLudciVU

spartak_t

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Oh, Daedelus,

While 3% inflation could be a big problem for a country with ~$17.5B GDP like USA, you just can't compare it with cryptocurrencies. If we assume that we have a coin with 20M supply and 3% PoS interest (inflation), then we have about 606k more coins created each year. That means about ~3022 BTC (or ~$716k) pressure/inflation/year and ~$1960 volume/day, which market must deal with at the price of 500k satoshi. Don't you think that it's possible (if we assume that the coin is kept "interesting" through the years)? PoS have some great advantages and this is the most important thing in it as technology. Inflation in it is not a big deal imho.

Daedelus

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Quote from: spartak_t on May 08, 2015, 08:29:04 AM

Of course my examples are valid if we are talking about perfect market environment, which is pretty much impossible in crypto-world, but I just think it can be achieved.

You think it is impossible in crypto and you also think it can be achieved. Fair enough, but there is no reason for anyone else to hold these views in the face of all evidence.

Quote

Will repeat myself though... I am 100% agree with you.

As long as you hold the view that inflation can be viewed as profit/interest, you don't agree with me and haven't been reading my posts.

BitJohn

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This link is a bit old but explains Proof Of Stake pretty well https://cryptocointalk.com/topic/700-proof-of-stake-explained-rough-draft/

spartak_t

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Daedelus, I want to make something clear and the idea is not to brag or something, but somehow to prove you that I don't need explanations about market, supply, demands etc... I have a master's degree on Marketing & Business Administration and certificate "A" from SCE (Sofia Commodity exchange).

I already said that I completely agree with your opinion, but you first might want to understand why PoS is good for the coin's network and how markets can deal with that inflation of yours.

Of course my examples are valid if we are talking about perfect market environment, which is pretty much impossible in crypto-world, but I just think it can be achieved. A coin may not be perfect, but parts of it can be excellent.

Will repeat myself though... I am 100% agree with you.

Daedelus

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Quote from: spartak_t on May 08, 2015, 08:06:01 AM

Quote from: Viper1 on May 08, 2015, 07:42:57 AM

That's actually the biggest issue with purely POS coins.

I think that the bigger problem of purely PoS coins is the price of the coin. Let's say you have $100 worth of some altcoin, but the price stays pretty much the same (this example excludes declining) for a long time. Having this $100 is in no use for you, because your "investment" is not working for you. This is how this coin will die in short time.

http://en.wikipedia.org/wiki/Supply_and_demand Prices don't stay the same.

Inflation won't provide a solution to declining prices, it makes the decline worse.

"I had 100 coins, inflation has given me 20 more. If I sell those, I am back to where I started but with some profit."

^This^ is flawed thinking. All things being equal, the value you had in 100 coins has now been diluted across 120. All things not equal (growth is free to fluctuate), the inflation acts as a brake on growth (G-I above).

People are selling the price lower, thinking they are maintaining value, and it feeds itself as inflation continues. Sooner or later, the 100 coins they hold start to approach zero.

spartak_t

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Quote from: Viper1 on May 08, 2015, 07:42:57 AM

That's actually the biggest issue with purely POS coins.

I think that the bigger problem of purely PoS coins is the price of the coin. Let's say you have $100 worth of some altcoin, but the price stays pretty much the same (this example excludes declining) for a long time. Having this $100 is in no use for you, because your "investment" is not working for you. This is how this coin will die in short time.

Daedelus

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Quote from: spartak_t on May 08, 2015, 07:21:08 AM

Quote from: Daedelus on May 08, 2015, 06:35:33 AM

....

You are the one who is wasting your breath. Cheesy

I will never look on PoS like real life inflation as long as the annual interest is not more than 2-4%. If the currency is developed good, market can easily deal with that "inflation". With that said, I will repeat that people will be more keen to hold their coins which vastly improves the network of the coin.

At the end I will say that I'm not arguing with you and I completely agree with your scenario about inflation, but I just think it can't be compared with cryptocurrencies.

Cheers,
Spartak

Semantics. What you choose to believe is irrelevant. If the currency is good, there is no need to force it to deal with the inflation that makes everyone poorer (unless of course you do actually believe inflation is the cause of steady growth?). Why don't you think economics applies to cryptocurrencies?

If your position is based on a belief without good reason, then yes, I too am wasting my breath.

Viper1

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Quote from: spartak_t on May 08, 2015, 07:21:08 AM

people will be more keen to hold their coins

That's actually the biggest issue with purely POS coins. Too many people hoarding them. Course that also alleviates the whole "inflation" thing since (assuming there's actual plenty of adoption of the coin), it decrease the supply which would lead to an increase in price. Doesn't really matter if you're creating 100% coins a year through staking if none of them get into circulation lol.

spartak_t

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Quote from: Daedelus on May 08, 2015, 06:35:33 AM

....

You are the one who is wasting your breath. Cheesy

I will never look on PoS like real life inflation as long as the annual interest is not more than 2-4%. If the currency is developed good, market can easily deal with that "inflation". With that said, I will repeat that people will be more keen to hold their coins which vastly improves the network of the coin.

At the end I will say that I'm not arguing with you and I completely agree with your scenario about inflation, but I just think it can't be compared with cryptocurrencies.

Cheers,
Spartak

Topic: Can someone explain to me how PoS works? - page 2. (Read 2877 times)