This change should benefit both miners and investors, as we roll back to N-Factor 15 and decrease the rate of inflation, your investment will be able to sustain it's purchasing power.
You are using words like 'inflation' and 'purchasing power' as if UTC is a currency right now. It is not even close to being accepted as a currency. Bitcoin isn't even close. UTC is in an adoption/distribution phase.
Although the inflation rate has been dropped several times by decreasing block reward, the rate is still too high, I believe that many other coins are starting to feel the brunt of their inflation as time goes on.
"too high" based on what?
The block reward was decreased already, and it definitely didn't seem to help. What makes you think you found the magical sweet spot?
Many cryptocurrencies are in a constant state of hyperinflation, with many many coins being minted over the course of several months, the money supply can grow by 10% or 20% within only a few months. This causes a drastic increase of coins in circulation, thus, in the same way that oil is diluted by water, the purchasing power of the currency begins to be diluted by the sheer supply. By lowering Ultracoin's block reward, this will take the gas pedal off of the coin expansion rate and cause a much slower increase in the inflation rate.
What cryptocurrencies? How about the ones that are already at little or no inflation?
You may be wondering how this effects you. Let's say you are mining Ultracoin now at a rate of 30 coins per block. This stays constant for everyone, and everyone enjoys a nice flow of coins (depending on your hash of course). However, unless you plan on buying something with your coins right away, you will most likely be saving them in your wallet. As time goes on more and more coins will continue to be mined, that means an increase in the inflation rate, which means the coins in your wallet will continue to be diluted by the ever growing supply. From a savings perspective, lowering the block reward is beneficial, as in time everyone will suffer the cost of inflation.
Oil diluted by water? What are you talking about? Oil and water are immiscible...
You are confusing inflation with price. You can have an increase in the money supply and not have it 'dilute' money that is out there. The US mint does this with commemorative quarters. Google VELOCITY of money.
To this philosophical and economic end, I believe the best course of action is to cut the block reward by 1/3rd to 10 UTC per block, this will decrease our inflation rate quite a bit while still rewarding miners. You may compare a block reward of 10 to Bitcoins block reward of 25 and believe that to be a small payout, however, keep in mind that Ultracoin's block target is once per minute, while Bitcoin has a target of one block per every 10 minutes. Every 10 minutes will lead to 100 new Ultracoins created, versus the current 300, with a goal of 100 million total. On the other hand, Bitcoin's 25 coins per 10 minutes with a goal of 21 million total. The lowered block reward will mean we should reach This rate is sensible and will allow the market to choose the correct value of Ultracoin without so much inflation.
You are really confusing the concept of inflation. Bitcoin has a long term inflation rate of 0%! Under your way of thinking, if I bought $1000 worth of Bitcoin now, it should be worth $680 in the future because 32% of all bitcoins have yet to be created, and as they are created, they will steal that value from the bitcoins I already have. You actually think that way don't you...
At this point, I believe cryptocurrencies have a chance of being much more highly accepted and adopted, with more than 99% of all Bitcoin being mined at this point the price of Bitcoin would have to be astronomical at this point for it to be worth mining (which I believe it will be).
I guess you also don't realize that transaction fees go to the miners of Bitcoin? Theoretically, if it was widely adopted, the transaction fees will be very significant and will dwarf the block reward (assuming little off-blockchain transactions). This was discussed in the Bitcoin whitepaper.
https://bitcoin.org/bitcoin.pdfI believe Satoshi Nakamoto made a mistake by allowing so much Bitcoin to be minted at one time, 93% by 2020, as this is too much wealth being consolidated into the hands of so few. At block 20,000,000 I believe a block reward to 1 UTC per block will suffice, allowing new miners to still adopt the currency as cryptocurrencies become a strong if not preferable alternative to government backed fiat. By the end of 2051, Ultracoin will feature approximately 87,188,544 UTC and be at block 20MM. Unlike Keynesian economic theory which states that inflationary money must be used by government or bankers to spur economic growth, the monetary policy for Ultracoin will reflect the need for distribution of the currency to a population that will be between 9 and 12 billion by 2100, and that doesn't count the generations of people in between. By 2110 I believe much of the world will have embraced crypto, and as popular cryptocurrencies of today begin to shut their doors to minting, Ultracoin shall do the same, at this point the inflation will be tapered off quickly and only serious mining operations shall remain that are fit to secure the network, for the sake of the network. By keeping the block reward at .01 UTC per block, this will ensure the network stays secure and hopefully will fund the mining operations without relying to much on transaction fee's, this should keep pools and private operations open for hundreds of years despite 98% of the currency having already been minted.
It should concern anyone that someone has the power to apparently change the entire distribution structure and algorithm of a coin based on a lot of "I believes" and seemingly completely arbitrary numbers. I am willing to bet that person doesn't have a master's degree, and I am wondering if that person has a college degree whatsoever--no offence really. You seem like a student who just read his first book on economic theory. It's good, but in my opinion, you still have some learning to do before coming up with grand assumptions on a coin you want to be the future of money. Even then, you should be humble enough to admit it is a theory, and you don't know for sure. You should not be forking a coin based on theory.
Keeping Ultracoin's distribution constant over the century will ensure that Ultracoin see's the widest possible distribution as technology advances and cryptocurrencies become more mainstream. As you already know, most people do not know about cryptocurrencies, and even amongst the ones that do, few own Bitcoin relative to the worlds population. Of course, in time, the popularity of cryptocurrencies will increase and with it so will its adoption and use. That is why it is important to maintain a steady distribution of coins, as well as to throttle back the inflation which has already affected so many cryptocurrencies. The Proof of Stake mechanism will also be modified, 5.6% interest is currently too high, most banks offer nowhere near this percentage and if they do it is often in the form of CD's and not savings accounts. Not only does this artificially high interest rate create inflation, it is too high of a reward compared to market alternatives. That is why the newly proposed interest rate will be lowered to 2%, still considered a high interest rate, but and also much more sustainable. Future scheduled decreases in the interest rate are 1.5% at block 4,000,000 and 1% at block 8,000,000 with no future rate decreases scheduled afterwards.
Is UTC not like YACoin in that transaction fees are destroyed? YACoin has about 5% rewards monthly with PoS, but that is the maximum average. For instance, something like 25% of YACs in existence are in cold storage and not collecting any PoS at all. Thus, with transaction fees destroyed, long-term inflation can actually go NEGATIVE. This concept is discussed in the PeerCoin whitepaper.
http://peercoin.net/whitepaperThe algorithm change is at least somewhat interesting. The overall problem is that you keep forking this coin, and this time it is based on theory at best. It would be different if you ran your theory by some PhDs, or some of the pioneers of other successful (relatively) coins. I don't think you have.
Disclaimer is that I have no real dog in the fight. I guess that makes me a troll? I don't know if the NFactor 15 will workout or not. Seems to be a variety of hardware out that performs well in terms of 'mining' at that stage, but I couldn't even tell you if that is good or bad. I have my theories I will keep to myself for now. Forking a coin based on your theories is strange to say the least
Unfortunately, I think I'm one of the lucky ones in that regard too. I think the 'mission' is different for different people.
