Topic: How is that PoS is not ponzi scheme (Read 577 times)

Entering into CRYPTO CURRENCY world (for now)... IS speculation.

There is a pattern of manipulation, and you are probably picking up on that.
Crypto is still new enough and so few regulations it is more apparent than other markets.
But the absolute truth is All Markets including OIL, Electricity , Commodities ,  & Stocks are all completely manipulated by the rich elite and governments.
One of the reason , I quit the stock market was the shenanigans they pulled with High-frequency trading Where they could move the price of a stock without ever really buying it or selling it.
As least with Crypto coins, they actually have to buy or sell it to affect the market price.

As far as PoS being underdeveloped,
technically PoW is a dead end due to its ever increasing input requirements,
but when you look at the marketcaps , the highest price coins are the PoW coins.
PoS is newer and does not have PoW input problems, but most have yet to realize this.

And their are multiple implementations of PoS, not a single version, that is evolution at work the strongest PoS design has yet to be agreed on by the public, it may be years before a single PoS design is ruled the dominant design. One example is the Car industry which has been around for decades, Gasoline is the default for its fuel, but looking here other fuel options are Compressed air,  Vegetable oil, Hydrogen fuel cells , Ethanol, Water , and Wood pellets (aka Biomass). Even an industry decades old is still evolving, so expecting crypto (less than a decade old) to be fixed in stone is wishful thinking.


 

Thanks for long and detailed answer.
My feeling of being schemed is not because of logic or philosophical/financial issues.
Is because of some kind of pattern that i feels cheap.
All the projects are purely executed, i mean whats the deal with this qt wallet. BOOST has http server, why not provide REST interface and implement client as local web client or something. Wallet has dozen of dialogs? couple of list controls and some graphs? Its not hard job for front end developer.
If you really must to stick to c++ code to work with blockchain, at least put some nice facelift on it.
All the coins are same tinkered software with different name on it. And they all feel the same.
Im using word feel here because i honestly dont understand technology enough to judge it properly. But i have 20 years in project management on various operating systesm and programming languages and this PoS business feels underdeveloped. How can it be if everybody have awesome teams of developers and so much money moves around. And so much users involved?

Actually it is not speculation , the lower inflation rate is what drives prices per coin higher.
Observe Bitcoin , within a year or so of their halvings which decreased their new daily supply created,
BTC have seen massive growth in their price per coin.

Bitcoin make ~1,728 new coins per day until the next halving.
ZEIT now make less than 500 new coins per day, our price will go nowhere but up.
The speed of the price growth is only dependent on the growth of usage.

It is math, not speculation.  


 

It just replaces POW with POS and inflation rate is pre-set. USD inflates too, is it ponzi?

It is just another coin with an advantage over POW coins.

Like any other it is speculation...and you hope it grows/increases over time.

The real advantage is that on top of that you get a proportionate return for your coins.  Same as POW/mining but your coin (in a way) mines for you (not that easy or direct but boils down to it).

In a real Ponzi Scheme, only the operator knows he is paying the old investors directly from the new investors.

In All Coins , there is no single operator in control of all the coins unless you entered into an ICO.
Easy Fix , don't buy ico coins.

PoW Wallets don't really do much at all except confirm transactions.
All of the real work is done by the mining equipment so you don't notice it , if you are not a miner.

PoS Wallets on the other hand are doing the mining/staking and competing , so they draw more resources than pow wallets.

Lesson in economics:
If a PoS coin inflation rate is too high, it can only sustain a specific price per coin until the excess that is placed on the markets because of the increasing supply decreases the price per coin.
It happens over and over again, and if you get in early enough you can make a quick profit before the price begins its eventual downfall. This has to happen because a PoS coin paids interest, and when it pays out interest the price is only sustained if the influx of capital is high enough to maintain it.
Over time as the influx of capital decreases , it begins dividing the marketcap now fixed price by the ever increasing coin amounts, so you see a constant lowering in price per coin.
And why does this keep happening,
Two reasons
1. Human Nature
When you get a 100% earning in a week , you think it is a great .
The Truth is that high % will always decrease your price per coin, but since you receive more coins you think it should earn you more.

2. A Few People do make money with high interest coins, but they get in very early and milk it with every staking, by selling all of their interest and holding their principle.

@ZEIT
We have seen these issues and fixed them by moving to an Ultra Low Inflation rate of only .0005% per year.
Meaning we make less than 500 coins per day.
So over time our price per coin will grow as our utility usage increases.

So here are your options
If you choose high interest rates, you have to get in early , and you sell your excess as fast as you earn them , realizing it price per coin will drop to nothing. The higher the % the faster & more devastating the drops in price.
or

Choose ZEIT where the price per coin will grow slowly over time.


Reasons why PoW is doomed
PoW input cost to maintain a PoW coin is in the Millions per months
Warehouses full of ASICS, that require enormous amount of electricity.
Some areas are already starting to ban PoW mining operations, as the drain on their electrical infrastructure is too high.

PoS as a consensus method is superior to PoW in the following.
PoS Input costs to maintain a PoS network is less than $1000 per month.
The PoS coins can have the same or higher transaction capacity than the PoW coin with no additional strain on the energy grid.
Main point is PoW is unsustainable and wasteful and PoS can provide the same services for a fraction of the monthly costs. And in the end that is all that will matter.

If you want a sustainable PoS Coin Network that price per coin only grows verses facing the inflation drops.
ZEIT is your only choice.  


 

FYI:
Take any coin PoS or PoW and calculate its # of new coins created per day.
Then multiply those new coins X its current price per coin.
Once you have that daily price to hold off inflation damage, you can decide for yourself if you believe that coin can maintain that influx of capital over a week , a month , or a year.

Ive looked up some PoS tokens like EMB and B3.
How is that not Ponzi scheme?
You have to buy in to stake. And i mean to see some returns you better be good on 2K USD. 10K better actually.
After that you have very unstable P2P network that takes ages to spin up. What this nonsense with node list? Why its not propagated automatically?
After that you get some reward for couple of weeks.
And than reward rate drops.
After that you have some messages about "fixing withdrawal".So its not so easy to get off.
So like.  Buy some tokens , get some reward and get out if you lucky enough to do so before network brakes down again.

Why syncing of wallet is so complicated? Its P2P - did you guys saw eMule back in the days? It was syncing gigabytes of data no problem, and my mom could operate it. With automatic propagation of nodes lists. Looks strangely suspiciously overcomplicated to me.

And the idea that oldest users with most amount of money are getting all the stakes...kind of ...look exactly like pyramid.
Im not trying to attack PoS but with PoW you have some separation between money holders and miners. Your rig will earn some money if hardware is up to date reasonably. In PoS is more like give me your money and sit quite.