Topic: Proof of Stake with an Ultra Low Interest Rate (Read 2271 times)

hmm,
maybe because I am going to pay them to stake & protect the network.  
(With any luck within a year or so the price alone , will make people want to stake & protect the network.)

Anyway simple payment it is the final conclusion I have to come too,
the local variable idea changing transaction fee met a snag and requires a centralized system to monitor ,
so unless someone figures out a decentralized way , it is not something I would want.

 

Well then tell me, how do you intend to make an incentive for others to mine (proof of stake or whatever)  your coin?  We need new blocks to transact..  and if it's only the original dudes who took a premine, then you have your centralization.  So why would I want to come in and help secure the network? 

I would agree with that , except for one issue.

I watched Mint have over $150,000 pumped into it's market cap and it soared to near 30 satoshis per coin.
Because of it's inflation, it is now ~ 4 satoshi.
5% rate on a coin with ~ 24 billion coins is 1.2 Billion per year.
Let's cut that in ½ to only 600 million new coins generated per year. (2½% inflation)
Meaning 1.64 million new coins generated per day.
Even if no one ever sells even 1 Mint, You still need $50.80 per day or $355.60 per week or $1524 per Month to cover your inflation alone ,
The drop in price from ~30 sat to now ~4 sat, it due to the coin not receiving that input amount on a daily basis.

Sadly Mint and my favorite ZEIT are in the same boat
CPA explained it best, True Value has to be created to match or be higher than inflation, if you want your price to be steady or rise.

Compared to BTC generating less that 2000 coins per day, and Mint generating 1.64 million coins per day.
There is almost no way for your coin to rise verses BTC at such numbers.

We either generate more coins or more value per coin by controlling inflation.
BTC has chosen more value , which is why their price keep increasing.

 

FYI:
In regard to punishing, the users can stake for a few hours and pay no transaction fees,
so it is not punishment, they are working for the coin to help cover its costs.

In my opinion I think MINT has the best configuration of balance. 5% PoS reward with only 3% money supply inflation. It's the perfect balance. The sweet spot.

I think don't think  can punish people for not staking frequently, only the richest will be able to stake every hour.
Too low of inflation of the money supply will eventually create fungibility problems. Bitcoin will have this problem if the price goes too high.

Well, I think there are other factors that exhibit positive feedback - things like ubiquity of valid tender and popularity as a currency AND store of wealth. For example, for most BTC users the effective rate of interest is 0% But we all use it! However in this current time and stage of ALT POS you are right.


Indeed! 

Hmm,

I will explain it to them , Like So.

If you stake for 1 hour every day, you never pay a transaction fee.
The longer you go with out staking , the higher the transaction fees.

If they can't grasp that , they have other issues.  

Or

You Stake Daily , You No Pay.
You Don't Stake Daily , You Pay More.  

 

FYI:
Actually the goal is not to punish the people , it is to give them incentive to stake.
Since the 1 hour of  staking time is equal to 1 day of not staking, it seems pretty fair to me.
I prefer it if they all staked and no one paid any fees.

FYI2:
We have to include a line that says Transactions Fee Multiplier with the variable # beside it, and it will need to update itself so they know exactly how long they need to be in stake mode , before they can send at 0 costs. They see 1 , they know it is not safe to send until it says 0.

That feels too random for the average user.

To be honest, I think every way to essentially punish those who don't stake (including my option I mentioned earlier) will prevent Average Joe from using your coin.

You have to keep your target audience in mind. If you want to create a nerds dream, fine, go ahead. If you want to battle Bitcoin, you have to reach people who are not interested in tech and schemes. Everything needs to look crystal clear. People might understand on a rational basis why they have to pay more transaction fees, but emotionally, it will feel random to them and they'll feel treated unfairly.

Actually I have looked at Nxt , and I don't care for it, too much centralization for my tastes.
They are trying to be a platform to add value, I just want to create a coin that is stable and let others create a platform around it , not have it be the platform itself.

Their price has done nothing but drop, no floor in sight.
Nxt does not have that potential. It is merely a Pump & Sale with no end in sight to its drop.
I am designing one that it will never be able to drop below 1 penny.  
It is going to do to BTC, what BTC has been doing to the alts.  Weapon of Choice will be Ultra Low inflation.


 

Take a look at NXT.

Proof of stake with no interest. 

The trouble here is that 1) you need 100% premine, distributed to your phriends 
and 2)  there is no incentive to mine

You would think that condition 2) would mean your coin is DOA, however -- look at NXT. 
There is some incentive to mine - for the phriends. 

This is called centralization, you basically have ripple here. 

You have a centralized token system.  At least the supply is public, so it's still a huge step up from the pure fraud which is charitably referred to as fiat. 

Yes exactly. It is not at all related to PoS. It is related to how us stakers handle our staking

I think focusing on the transactions fees , may be the solution.

After the coin is rolled out, the client's wallet , has a variable flag set with either 0 , 1, 2, 3, 4, 5, 6, 7

Every 24 hours, that staking has been turned off , that # increases by 1.

Wallet comes online , once online , 2 conditions have to be met 
1st Condition Wallet has to be in Sync
2nd Condition Wallet has to be in Staking mode

If both conditions are met , then for every hour the wallet is synced & staking , the variable flag subtracts 1 until it reach 0.

If you are at 0 , then you can send coins without any transaction fees,
If you are at 1, then you can send coins at 1X the transaction fees.
If you are at 2, then you can send coins at 2X the transaction fees.
If you are at 3, then you can send coins at 3X the transaction fees.
If you are at 4, then you can send coins at 4X the transaction fees.
If you are at 5, then you can send coins at 5X the transaction fees.
If you are at 6, then you can send coins at 6X the transaction fees.
If you are at 7, then you can send coins at 7X the transaction fees.

So if you have been offline for 7 Days, you have to be online for 7 hours to avoid the higher transaction fees.
It is also an incentive for People to Want Exchanges to stake, so their withdrawal fees are lower.

Anyone see any problems with this model?

 

Never said it was hard to understand, just wanted the point made it ,
that either PoW or PoS can be affected, as it is number of transactions and not a direct staking only issue.
And you helped me accomplish that. 

Like you, I don't really see it being a problem for the foreseeable future.

 

That is why change addresses are used, at least on of the reasons why. And yes it would if it accumulates lots of transactions. Not sure what you aren't understanding here, for this particular attack, the more tx on an address the more susceptible. Its that simple. Absolutely nothing complicated about it. Some of my staking wallets have upwards of 50k tx's. I have seen staking wallets with over 100k. This is one of the fundamental problems about how lots of us manage our wallets.

That being said, this is not an attack that is really possible with today's computation.

Say I run a Business where I have hundreds of BTC transactions sent out everyday, would this address not also be susceptible?


 

 

Problem is people are not sensible , the higher % will always be choosen by the short sighted , Higher Interest Rate even at the destruction of the coin.
Just look at Sprouts and Tekcoin, for verification of the above statement.

 

Why would you need any kind of PoS reward (other than transaction fees) really? Couldn't you keep a PoS blockchain running with transaction fees alone? Maybe have an ultra high interest phase at the beginning for initial distribution.

This would mean, that less people would stake, because there wouldn't be a lot to gain from it. This is contraproductive in decentralization terms, but if, let's say, a high two digit number can still stake with profit, we can assume that the network is going to be safe.

Yes it is number of transactions signed. So if you have a wallet that has been staking and signing lots of transactions, it would be more susceptible to that type of attack.

Hmm,
Ok your reference is more to the security issues of all Online Devices, (which would be a danger to PoW or PoS equally.)

You can use paper wallets with either staking or non-staking coins.  

And with an ultra low rate staking coin, there is not much incentive to stake, so you could store them all offline if you wished.

Incentives to stake , is what I am mainly looking for.
I have discovered that many would agreed to accepting payment in the Ultra low inflation coin to Stake 24x7 to secure the network.
Only problem with it , is the payment for the incentive will come out of my pocket for the 1st year or 2.  
By the 3rd year all of the Incentives need to come from the amount of transaction fees and constant increases in the Coin Value verse Fiat & BTC.
Which due to PoS low economic costs may become profitable somewhere in that time frame.


 

FYI:
By the way Decred has an Offline Cold Staking for Proof of Stake coins like what you mentioned in your earlier post.
https://bitcointalksearch.org/topic/anndcr-decred-community-governance-bitcoin-devs-lightning-network-1290358
Cold staking and decentralized stake pooling - The ability to generate new coins without the risk of having your coins online when PoS mining. The PoS mining system has also been engineered with distributed, decentralized stake pooling in mind, so that even those with small amounts of stake can participate in network validation.

My point was more that you can, or at least should not be a 100% sure, that a device you are online with hasn't a  vulnerability. It is good and common practice to keep big amounts of coins on offline wallets to keep them safe.

That doesn't work if the wallets you use are staking.


AFAIK, NXT has 0% interest and is still a PoS coin.

Interesting article On the Instability of Bitcoin Without the Block Reward
http://randomwalker.info/publications/mining_CCS.pdf


Which is why Proof of Stake will succeed Proof of Work,
because an the end of the day , it will cost abundantly less to keep a coin network running with PoS verses PoW.

The Problem is the mindset , that PoS is supposed to pay interest like a Bank,
instead of just the fact it is the most economical way to run a coin network.