Clear as mud:
https://hashtalk.org/topic/20701GAW_CEO
Admins
Global Moderator
Industry Innovator
Paycoin POW Explanation
Greetings!
Given all the confusion in the forums regarding the Proof of Work phase of Paycoin, I thought I’d post tonight to clear it all up. Additionally, I want to explain how things have played out so you know where we are tonight.
As you are well aware, Paycoin started life in the first draft as a PoW coin that could be minable by anyone, anywhere. Through the comment period of the first draft, it became clear to us that we needed to reconsider some of the design decisions.
We received excellent feedback from this community and from both our partners and our merchants. We decided that we needed to slow down the initial number of coins mined at inception, as well as do a better job of producing more coins as the adoption of Paycoin expands.
Flooding the market with coins that aren’t immediately staked or used creates a lag in the marketplace -- too much supply for demand, and the potential for devaluation.
We believe this is the primary contributor to the volatility of BTC and the reason why mass adoption has not been possible.
Paycoin will not suffer the same fate.
Naturally, Paycoin needs to have a way to increase production when the demand exists. Instead of working with the available technology-to-business model, we decided to work back in the other direction to make the technology suit the business case.
We knew once we had a model that would work, we could wrap the technology around it to make it happen. This is how we created the Paycoin that you know today.
Community Speaks -- We Listen and Act.
While the majority of the technical community has commended us for the innovations behind Paycoin, we have had constructively critical feedback as well. Chief among the issues raised were “not enough innovation” and Paycoin’s centralized nature.
Paycoin is so advanced, it was beyond the powers of nearly every developer we talked to about it.
We shopped the project around the world, and virtually every development team told us it was technically impossible to build.
Through perseverance, however, we found a group that was up to the challenge. Many things had to be invented to make it possible, and those inventions were not without a monumental cost to build.
Regarding centralization, there is a risk of centralization with all crypto coins.
Paycoin’s hybrid mining model takes advantage of large investors, (Market Makers,) who are motivated to create a successful market for the coin.
The bidding process for Prime Controllers also ensures that there will be entry points at regular periods of time for new investors and Market Makers to take responsibility for transaction processing; thus, allowing up to 100% decentralization as time passes. It’s the large investors and Market Makers who will help create the markets for Paycoin to ultimately be successful.
It’s this commitment that will bring success down to the level of the individual miners. Paycoin is truly unique that way.
Once the design of the coin was finished, we took a step back and said,
"Let’s set an example for all other coins by not pre-mining. We have the hashing power to mine it ourselves, and we’ll compete for the coins."
We felt we would end up with the same amount of coins we intended to own, but we also felt that following that principle was equally as important.
What we did not know at the time of the announcement about not pre-mining, was that we just got word that multiple large mining farms intended to mine the coin at inception as well. Some of them shared our Paycoin vision, some did not.
Despite this information coming to our attention, we decided that we would continue to allow Paycoin to be minable, and we would even compete for our own allocation by mining. At the same time, we would reserve enough coins so that all the customers who had already earned them with HashPoints would get their allocation in full, prior to public mining.
In summary:
We felt we needed to mine our own coins, but reserved the coins that already belonged to our customers and investors.
As of today, this will cover the customer/investor reserve, but we will increase the reserve to keep up with customer and investor demand. We will prioritize customers and investors over public miners and our own allocation.
Half of the initial coins will be going to HashPoint customers, and the other half will be publicly minable. The public mining period will end once all the minable coins have been awarded.
Once all the coins have been mined, Paycoin switches to PoS and stays that way going forward.
Finally, I’d like to address this question, "Will Hashlets be able to participate in the PoW stage?"
The answer here is complicated by the fact that, as I mentioned before, many large mining operations are planning to mine Paycoin.
In order to ensure that our customers have the best advantage at launch, I made the decision to extend HashPool mining, which gives our customers a 4:1 advantage over traditional mining -- ensuring the best possible profitability and as quick an ROI as possible on both Zens and Primes.
In summary, after running our mining simulations, and given the expected hashrate, we will have and the resulting difficulty in the PoW stage, non-institutional miners will not be profitable at the level we want for our customers. Despite that, we are still trying to figure out a way to allow Hashlets, (at least Primes,) to participate.
I hope this clears up some of the confusion around the POW stage. We will let you know when the next phase starts. We will also let you know how Hashlets will participate. As always, we will do what's in the best interest of our customers!
