[quote=“MeBeingAwesome, post:11, topic:1813”][quote=“Taylor05, post:8, topic:1813”][quote=“MeBeingAwesome, post:3, topic:1813”]Side notes I came across while reading:
For your quote “The first “jolt” should happen sometime in 2017, and no one can yet predict what the consequences of this sudden change will be.”
http://bitcoinclock.com/ shows the date to be in September 2016, might be a good addition to the article.
For “While this is true, the supply can only grow by at most 1% per year” it should be stated that this will be true if PoS blocks are the only ones found; inflation will be higher than that in the short-term while PoW is still factored in.
For “Another related criticism is that due to the 1% “interest” rate, Peercoin makes the rich richer and the poor poorer.” I broke it down here if you feel like linking an analogy http://www.peercointalk.org/index.php?topic=940.0[/quote]
Thank you for these valuable comments. I will incorporate many of them right now.
Concerning the “1% makes the rich richer” issue, my understanding of the proponents of this theory is that if “rich person” holds 1000 PPC and 10 “poor people” hold 100 PPC each, the issue is that any reserve balance will disproportionately affect “poor people”. Let’s say the reserve balance needed to transact is 50 PPC. Then the “rich person” would earn PoS on 95% of her money. “Poor people” would earn it on only 50% of their money. Thus, I skipped that argument altogether in the article because it is true that money needed to transact wouldn’t earn stake. That’s why I went the route to point out the absurdity even though that’s true. “Rich people” have plenty of other advantages over the poor already (access to exclusive classes of investments like hedge funds, greater diversification of investments, access to tax advice and tax efficient investment vehicles)… the thought that they’d leave their wealth in the form of Peercoin (essentially cash) so that they can get a fraction of a percentage advantage over the general population is absurd. Most people will mint PoS anyway once it’s easy and built into the interface, eroding almost all of this advantage. Hopefully, that makes sense… maybe more for the article, but brevity has already been lost, I’m afraid. :P[/quote]
That certainly makes sense. A Peercoin user brought up that same argument in my thread here.
My rebuttal is that this argument ignores the negative utility associated with holding Peercoin for PoS minting. In your argument the “reserve balance” needed to transact is 50 PPC. That means that the rich person is staking 95% of his holdings (a negative utility, because he cannot spend the coins for a certain time frame afterwards, in this case 520 blocks), whereas the poor people are only staking 50% of their holdings (less of a negative utility on a comparative basis). The very slight increase in PoS rewards over time for the rich person only comes as a result of him accepting the negative utility of less liquidity in his holdings on a short-term basis.[/quote]
That “Peercoin user” is me. I think you are confusing with two issues. One is how the current implenmentation of POS reward affect rich and poor people. Another not being able to move the money affects rich and poor people. I’d say poor people are more affected in the second issue because they have less resources to go around when money is locked in POS minting. Saying that rich people is not getting richer under the current implementation (re the first issue) is not true. It’s misleading and ultimately not good for Peercoin.
Whether this effect (the first issue above) is significant enough to be a concern is another matter. As Taylor05 pointed out, it’s perhaps not an issue for most people. What needs to be said is quantifying “the rich people get richer” effect by giving examples like in my post.