Topic: Currency idea: Block reward based on mining difficulty - page 2. (Read 2514 times)
Ahh but the new $1000 card produces twice the hashes at roughly the same power consumption.
Moore's law. Roughly speaking, the same money will buy you twice as many hash/s in 18 months.
It's interesting, but will be very tricky to do properly. Assuming miners spend a constant amount on hardware over time, block rewards would go up 25% every 18 months, right? That's probably too much inflation even for a Keynesian currency. I'm assuming you want below 3% annual inflation, which means your payoff function should factor in % increase in the money supply too. You would have to get your econ math right the first time.
Good luck!
Good luck!
"but I propose that the relative effort of increasing difficulty by X% should have little variance over time. In other words, going from 1,000,000 difficulty to 2,000,000 at some point in the future will be as cheap as going from 1,000 to 2,000 right now."
You are making a major assumption. It depends on what you want to achieve. Do you want more coins to be awarded as more people join the network? Because that is the primary force behind bitcoin's difficulty at this point. Down the road it will be improvements in hardware and so on, but it is not possible to account for both the number of computers and the power of those computers in one equation. At least not in the way bitcoin does it.
You are making a major assumption. It depends on what you want to achieve. Do you want more coins to be awarded as more people join the network? Because that is the primary force behind bitcoin's difficulty at this point. Down the road it will be improvements in hardware and so on, but it is not possible to account for both the number of computers and the power of those computers in one equation. At least not in the way bitcoin does it.
That goes directly against the concept of putting out X coins per Y time. In bitcoins case, 50 coins per 10 minutes.
EDIT: New reward algorithm is nSubsidy = log2(difficulty)
This method of money creation to achieve a stable monetary policy has been suggested before but has been shot down quickly on the assumption that it would create hyperinflation. I agree that, because of technological progress, increasing difficulty by X amount will be cheaper in the future than it is now, but I propose that the relative effort of increasing difficulty by X% should have little variance over time. In other words, going from 1,000,000 difficulty to 2,000,000 at some point in the future will be as cheap as going from 1,000 to 2,000 right now. Thus the block reward could be a function of the difficulty growth rate to maintain stability.
This method of money creation to achieve a stable monetary policy has been suggested before but has been shot down quickly on the assumption that it would create hyperinflation. I agree that, because of technological progress, increasing difficulty by X amount will be cheaper in the future than it is now, but I propose that the relative effort of increasing difficulty by X% should have little variance over time. In other words, going from 1,000,000 difficulty to 2,000,000 at some point in the future will be as cheap as going from 1,000 to 2,000 right now. Thus the block reward could be a function of the difficulty growth rate to maintain stability.
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