Topic: Updated: Proof-of-Stake interest is safe and does not act as inflation. - page 2. (Read 4165 times)

I'd wait until we see their source code before jumping on board.  I certainly hope they have a solution though because a pure PoS system is something that would really help crypto-currency get out of the bubble-nature it is in now.

Bitcoin has inflation, too.  Every time new bitcoins get mined the bitcoin economy experiences a bit of inflation.  Of course, that inflation ends when all bitcoins have been mined.  Additionally, the inflation is offset a little by lost coins.  In the balance of things bitcoin is deflationary.

A PoS system like peercoin contains inflation by design but not in a static 1% way.  At first the inflation comes from both PoW coins and PoS coins coming into existence.  As with bitcoin, the PoW inflation will end when all PoW coins are mined.  However, unlike bitcoin, peercoin destroys coins with every transaction. They go poof and exit the system.  This is done to offset the inflation caused by new PoS coins coming into existence.  Interestingly, I believe if everyone spends there peercoins immediately the peercoin system can actually become deflationary because more coins will be destroyed during the transactions than are created by PoS work.  Therefore, overall peercoin is not exactly 1% inflationary.

The peercoin designers did not design peercoin as a micro-transaction system.  They want it to be more like a savings account that earns interest. Therefore they reward people for saving their coins by allowing savers to mint new PoS coins.  PoS minting also has other benefits as described here:

https://en.bitcoin.it/wiki/Proof_of_Stake

I see your point, but I disagree. I don't think it is a good idea to have the supply grow or shrink with "demand". If the entire supply is used up, a new one can be made. But this way it does not devalue (or increase the value of) the existing currency.

I do like your idea of equal demurrage and interest cancelling eachother out

In PPC transaction fees (currently 0.01 per kB) are destroyed.
So, with high transaction volumes it's even likely to experience deflation in total money supply.
Even now sometimes blocks with a high number of tx's contribute negatively to money supply.

So it's a dynamic system, I'd never call it truly inflationary.
In fact, it might prove to be even more deflationary than capped-supply coins.

Awesome! How many coins max is there? (I hope not hundreds and hundreds of millions like some of these coins)

I would if I had the programming know-how

I like your idea and think it's good if implemented and works just like you say. Then that would be great!

If one wants a non expending money supply with a PoS system it is a simple matter to combine the Demurrage feature in Freicoin with a PoS reward such that the two cancel out.  Effectively your demurrage is refunded when the user sighs a block.  The rate of positive 'interest' from a PoS reward system can be more then, less then or equal to the demurrage rate such that the net rate of interest can be any desired quantity including zero. 

Personally I do NOT think a fixed supply of coins is desirable, coin supplies should grow (or shrink) with the demand such that they maintain equal purchasing power over long periods of time.

NEXT is PoS coin without inflation.
https://bitcointalksearch.org/topic/nxt-descendant-of-bitcoin-updated-information-345619

why don't you make one?

I replied to the original post, not to you.
Also, all the currency at the moment has either inflation, deflation, or both. Bitcoin is (eventually) deflationary in nature in that there is a finite amount and once minted no more coins would be made, while population increases and old coins are lost.

I was saying that the only way to stop it is to have fiat currency that is tied to population count, eg, 1000$ per citizen. at census either print more OR "spend" some tax money to destroy money to keep the value at 1000$ per citizen.
The problem is that no government fiat money would ever do that since they use it as stealth tax and don't give a damn about the quality of their currency.

Although the effects of deflation on cryptocurrency is mitigated (unlike other forms) because being digital currency they can be infinitely divided as needed. And to begin with deflation is not a big deal anyways, unlike inflation which is horrible

Is NO ONE seeing MY posts? I'm trying to make it as clear as day that there doesn't have to be inflation OR deflation. You can just have new unspent outputs instead of your old coins! Gah! I give up trying to make people around me see my reasoning.

Edit: sorry for being rude, I just have had a bad day. I just didn't realize people WERE reading my posts about PoS not being bad.

Inflation is bad, deflation isn't too hot either though.
Ideally you want to tie money quantity to population, problem is that can only be done with fiat currencies and those love their inflation too much

As far as I know, there is no coin that supports PoS without inflation. It would be a cool concept, and I'd be happy to make it, if I knew how. Basically, you'd have to send 1% of the coins as a TxFee, and destroy the TxFee in each Transaction. Then, you put the PoS's 1% interest in play. You destroyed 1% of the coins, and are now getting it back, but without the previous history behind each one. It's a brand new unspent output in place of your previous coins!

Luckily it is only 1%, but why? The question is: why does there have to be any inflation? Who felt it was necessary to add that? Are we just so unable to think beyond the chains that have already been given to us that we can't free ourselves?

It's like the guy who is in prison for half his life and gets out. He creates a bedroom with bars on the windows and a prison-like setting because that's all he knew and it makes him comfortable to be in the same setting again.

Where did you get that from? Perhaps you should read more of what has been written before replying.  Of course they have to get made. I want coins coming out of work done, not just minted for the fact that someone owns some.

There is nothing wrong with 1% inflation.

So you want a cryptocoin network that never creates any coins?

Can you name one coin that implements proof-of-stake without any form of inflation?

I'd say a coin with both proof-of-stake and proof-of-work and without the inflation, would be a very great coin indeed! I am not aware of one that exists.

Kind of like I said earlier, right? It would be more anonymous, too? [don't know if that is true].