Topic: Proposal of a "stable" coin mechanism with no oracle or peg - page 2. (Read 624 times)

All coins will not finally get mined. Blocks will always have coin rewards and they can increase or decrease over time. You can control inflation by destroying the coins in the transaction fee.

thank you for the post. refer to the PDF version in page 5:


while you have infinite coin supply, how you can remove the transaction fees? this means after years, finally all coins will get mined and after that miners will find no incentives to mine new blocks.. even in continue the paragraph - that tries to describe the consequences - doesn't provide a solution. you you please clarify this paradox?

Yes, this is correct. It would only smooth price variations.

Yes. The system would have activation thresholds. From section 5.1, third paragraph:
I don't see how. This would increase the coin supply, drop the price and consequently the hash-rate. The network then decreases coin supply, the price and hash-rate go up.

I don't see how the constant change of hash-rate could make the network less secure.
The scenario of a very low hash-rate wouldn't be very different from what currently happens:
1. The price drops;
2. The hash-rate also drops.

As I understand what you are proposing is:
1. The price drops;
2. The hash-rate also drops;
3. The coin reward per block decreases and/or the destroyed fee increase;
4. More miners leave the network since the reward per block is smaller.
5. Hash-rate panic/crash and 51% attack.

This would not happen, since 4 and 5 would actually be:
4a. More miners get into the network or none leave since the certainty of the price going up offsets the block reward cut;
OR
4b. More miners get into the network or none leave since only the destroyed fee increase do not affect them and there is certainty of the price going up;
5. No great difference from what actually happens.

I think people would be very interested in a crypto-currency like this one. Note that within this system the hash-rate variation would be made smoother and not zero. So inflation and deflation would be kept within a certain threshold instead of being fixed.

So basically you attempt to make "stable" coin by :
1. 2 coins (on a blockchain) with exactly same feature
2. Control inflation/block rewards based on hash-rate

As for 1st idea, it's only stable when coin A traded with coin B and vice versa. If all holder, investor and users no longer interested with both coins, both coin price will crash.

As for 2nd idea, it's really interesting idea. However it would fail if :
1. Miner looking for short-term profit and miner could use his ASIC/GPU to mine other coins.
2. Investor or miner who hold lots of coin decide to dump this coin

Additionally, it would make the network less secure since hashrate constantly changed and there might be times where hashrate is very low which allow 51% attack at low cost & i doubt people interested with cryptocurrency without fixed inflation rate/growth supply cap.

I wrote a paper with two different ideas for a coin with a stable price. By that I mean a price that does not change so abruptly as of now. None of those ideas involve a central authority, oracle or asset peg, they do not require fundamental changes on how block-chains work.
It's a short paper, 6 pages. Initially it was available only as pdf but security concerned users asked for jpegs too.

Note: We are mainly discussing the second approach here, which honestly I think is better. You can jump to section 5.

https://github.com/UmaPessoa69/coin-smooth-price

Note: I posted it some days ago on the economics section but it didn't get much attention and a user suggested bringing it here.