Inquiry regarding the economics of block rewards

dnaanders

full member

Activity: 126

Merit: 100

Quote from: lnternet on February 05, 2014, 08:01:48 PM

You can do that, it makes some sense.

You could also try to have a mining rate that is related to the speed (/difficulty) of the network. No linear dependance of course, but something like

x - seconds since gensis
y - latest difficulty (normed so that y << x)

blockreward = ln(y) * x^2 / e^x

That's actually a great idea, I never thought of anything like that.

lnternet

sr. member

Activity: 299

Merit: 253

You can do that, it makes some sense.

You could also try to have a mining rate that is related to the speed (/difficulty) of the network. No linear dependance of course, but something like

x - seconds since gensis
y - latest difficulty (normed so that y << x)

blockreward = ln(y) * x^2 / e^x

dnaanders

full member

Activity: 126

Merit: 100

Quote from: timewave0 on February 05, 2014, 07:00:56 PM

The quantity of the reward increases, but if the value of each unit decreases, the value of the reward won't necessarily increase.

Yes, but that's if the block reward went up for the entirety of the mining period. Since the reward would go down for 80% for it (after the rising period) wouldn't that give people an incentive to mine as much as they could during the first period? People wouldn't factor that in? I'm genuinely curious

timewave0

newbie

Activity: 37

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The quantity of the reward increases, but if the value of each unit decreases, the value of the reward won't necessarily increase.

dnaanders

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Activity: 126

Merit: 100

Quote from: timewave0 on February 05, 2014, 05:10:36 PM

Miners would either mine other altcoins until the block reward increases, or not bother at all because of the devaluation of your proposed altcoin over time.

Well yes but after the block reward increase period, the value would increase.

Undone

member

Activity: 95

Merit: 10

This is essentially what the bitcoin model aims to combat - monetary inflation.

It would devalue the coins of previous holders. Who would want to buy it on the exchanges if each purchase devalues as the next block reward is found?

timewave0

newbie

Activity: 37

Merit: 0

Miners would either mine other altcoins until the block reward increases, or not bother at all because of the devaluation of your proposed altcoin over time.

dnaanders

full member

Activity: 126

Merit: 100

Let me preface this by saying that I may be completely wrong in my observations, I'm just wondering about this:

So I was thinking, the big problem with a lot of altcoins (mining them in particular) is that people are afraid that they have "missed" some sort of train, boat, you name whatever default form of transportation. This leads many people to be hesitant to mine said altcoin, because they think that it's not worth it. But, what if there was an altcoin released that ROSE in block reward for a certain amount of time (maybe a year or so), and then lowered like a normal coin after that period of time? It would give people an incentive to mine as the rewards are increasing, and as the value would rise when the rising reward period ends. And if you did it conservatively enough, it wouldn't depreciate in value that much when the rewards are increasing.

Sorry for the jumbled text, sort of just wrote this as I was thinking it.

Topic: Inquiry regarding the economics of block rewards (Read 753 times)