I don’t like the idea of “temporary”, “old” is poorly defined, the question of “how much” is slippery, and size is relative unless compared to fundamentals. I believe there are many impasses to maintaining good consensus down that route, not the least of which is a concept of original intent.
I think that a 1%/1% choice is very straightforward and justified, and havent seen anyone bring up a reason why such an elegant solution is not the correct course of action.
There’s no point repeating the points I made in favour of increasing inflation slightly. There is clearly controversy around increasing supply inflation. However, if PoW is removed, then I wonder if PoS inflation can be raised in lieu of that.
The current total inflation is around 2.25%. The 1.5% option without PoW would give 1.92% at the current participation. Surely it is reasonable to go for the 1.5% option with PoW removed.
1.92% at 30M coins would be ~1564 PPC minted per day. If we have the same throughput, fees could burn up-to 1440 PPC a day. If the throughput is increased slightly, there could be a possibility of fees exceeding the amount minted if enough block space is utilised.
I do not believe it is reasonable to have baseline inflation above 1% specifically because it creates contention. I agree that there is no point repeating the points.
I support your updated design proposal with the following points of agreement:
New Blockchain Creation: Establishing a blockchain with a genesis key of 29.44 million coins, fully utilizing a proof-of-stake (PoS) consensus mechanism.
Claims Period: Implementing a 120-day window for claims, anticipating that 5 million coins will be claimed.
Legacy Treasury: Transferring unclaimed coins to a Legacy Treasury secured by an 8-of-10 ROAST address, permitting late claims for 3-5 years, with any remaining coins burned thereafter.
However, I propose a different approach to inflation and supply finalization:
Alternative Inflation Model: Instead of adhering to Peercoin’s current minting inflation until reaching a 21 million coin cap, suggest adopting a minting mechanism that sustains a 2.5% annual inflation rate indefinitely. this approach avoids the need to artificially constrain the supply to an arbitrary 21 million coin target. Such a reduction could appear inconsistent with the initial design and create confusion.
Why 2.5% Inflation?
Incentivizes Participation: It offers ongoing rewards for stakers, fostering active engagement and enhancing network security.
Economic Flexibility: Controlled inflation enables the currency to scale with increased adoption and usage, unlike a rigid fixed supply.
Balanced Design: At 2.5%, the rate is sufficient to encourage participation while remaining low enough to maintain value, positioning Peercoin between hyper-deflationary systems (e.g., Bitcoin) and higher-inflation models.
I have about a dozen additional reasons why 1%/1% is the right answer if you need more persuading.
Yes, I’d like to hear some more reasons.
Would it be viable to cut the coin age based reward to zero and allocate that inflation budget completely to the static reward instead?
i don’t know where you got the number of 5 million peercoin currently minting, when looking at time period of 2 years we will have approximately ~12M ppc eligible for duplication of unspent outputs.
duplication would happen instantly, in one single block, money supply would increase by amount of coins that addresses that have been active last X years have held at previous block.
my proposal is simple in the way that it does not modify any parameters of the blockchain or economics. “dilution” happens instantly and life goes on as before.
and just in case somebody has missed my first message, i am strongly against any such treachery, just sharing the idea that I had during brainstorming.
dead coins are not a real problem at all, it’s merely an excuse to create a new chain. inactive addresses or coins that anyone else has is not a problem worth spending brain cycles thinking about in my opinion, but what is worse is ideas of introducing mutability of ownership. diluting or expiring other people’s currency is exactly what central banks are notorious for. why are you trying to bring the worst of fiat system into crypto is beyond my understanding.
removing coinage would incentivise splitting all of your coins into 0.01 ppc outputs to rig the lottery, bloating utxo table considerably.
You’re right, I didn’t think about that. What about invalidating outputs that are older than X years? Would that be possible? It would force holders of “old” coins to mint or at least move them sometimes, which would make it clearer how many Peercoins are actually in circulation.
everything is possible, but in my opinion, changing the rules of peercoin drastically as you describe is just plain unfair to those who have coins in their paper or hardware wallets or in backup somewhere or whatever.
when judging the merit of proposed changes to peercoin, i always go back to whitepaper and think, does this change bring us closer to ideas described there?
it doesn’t mean ideas that don’t fit white paper are bad, they might be good for a different project.
I think you have a valid point, although in my opinion that measure would be far less drastic than other proposals in this thread. Especially if it is announced well in advance so paper wallet holders have plenty of time to act accordingly. What I definitely wouldn’t want is more inflation and/or dilution.
Dilution is not the solution, at least in the short to medium term.
I am skeptical that removing PoW is a good idea, particularly if the prime concerns of PoW are one of optics (mining bad) or current holder self-interest (miner sell pressure bad). My understanding is that annual PoW coin supply approaches zero over time due to the exponential increases in ASIC hash power, so is this not a ‘problem’ that is already solved? Miners are performing a socially valuable function by distributing a steady supply of new coins to people who mint, or who will become future minters.
Starting a new chain or diluting existing holder to the extent of 6 - 7% p.a. because “muh scary big old addresses” is insane in my humble opinion and easily solved by keeping PoW humming. Not to mention it is completely contrary to the intentions of the original peercoin whitepaper, as has already been mentioned here.
I’ll wait to hear what Nagalim has to say, but I suspect that 1%/1% and keeping PoW is probably is the ‘least worst’ option that will strengthen the durability of the peercoin chain the most.
I initially voted yes in this poll because it sounded like a good way of diluting the questionable addresses. However, if possible, I would prefer not to drastically change Peercoin’s economics. Being consistent with Peercoin’s original design requires keeping inflation on the lower end. If these addresses are actually a real problem, and not just an imaginary one we are inventing, we still need a solution for it.
Raising the PoS inflation drastically moves away from the economics of the original design, not to mention it may take a whole decade to see real progress with the dilution. That’s just too long to solve the problem and moves too far away from the original design. I won’t even bother with raising PoW inflation.
Creating a separate blockchain using an airdrop has too many downsides to me as well. I don’t like the idea of losing our entire chain history, and the confusion and potential for lost coins would be a real issue. Just imagine, we have to convince all the exchanges to upgrade to the new chain and do these special procedures to claim coins to match their customer’s balances from the old chain. They’re not going to want to deal with that from a low market cap coin. They would rather delist us than do work.
And even if they did, then you have the problem of stakeholders who are unaware of the new chain deciding they want to sell some of their coins one day. So, they open their trading account on MEXC and deposit some coins only to find the coins never arrive in their deposit address. What happened? They tried sending PPC using the old chain. MEXC is not running the old chain anymore, so their coins get lost forever. Yes, it solves the problem very quickly, but there is too much potential for user confusion, and we lose our chain history.
The best idea I’ve heard is from Backpacker, even if he disagrees with it. His proposal was that addresses that have minted coins in the past couple years would have their balances double instantly in a single block. So, for example, say the supply is 30 million. 20m PPC are inactive addresses, while 10m PPC are actively minting. If this proposal went into effect, the supply would increase to 40 million in a single block. The 20m inactive addresses would remain exactly the same, while the 10m minting addresses would double to 20m. So, it would become 20m inactive and 20m active. If you had 100k PPC in your personal address and you have been minting, you would suddenly have 200k PPC, while the person who wasn’t minting would still have only 100k. This is what is meant by doubling the coins.
Here are some pros and cons for this method…
Notice I said above that stakeholders will find the dilution unfair, not that it is unfair. As others have pointed out in this thread, any stakeholder can choose to mint and avoid dilution. But I would also like to point out, it is the ultimate responsibility of the investor to pay attention to their investment. It’s not good policy to invest money in something, whether that is a stock or cryptocurrency, and then just forget about it. If you don’t pay attention to your investment, then you only have yourself to blame if something drastic happens. If you were taking responsibility and monitoring your investments, then you could have made an informed decision before it was too late.
At the same time, Backpacker has a point. This is the kind of stuff that central banks do. Do we really want to lower ourselves and imitate them? What is the point of Peercoin then if we do that? On the other hand, central banks don’t have to worry about potential 51% attacks due to low security. Is improving chain security worth the reputation damage this dilution may cause?
I would say it depends on if these large addresses are a real or imagined security threat. Some people think it is an issue, and others think it’s no big deal. The people who do think it’s an issue point to the top two seemingly inactive addresses that hold 12.24% of the supply. They believe this kind of supply concentration scares away investors.
Peerchemist, on the other hand, pointed out on Discord that people are buying into Bitcoin and Litecoin without worrying about large inactive addresses because the only thing they care about is whether the price is going up, and that people are simply not buying Peercoin because the price is not appreciating to their liking, not because they are scared of supply centralization.
Regardless of the price, there is also the question of whether these two are so large that they could pose a security threat if they suddenly turned malicious. What are the odds that would happen when they’ve shown so little interest that they haven’t actively minted or transacted in 4-6 years?
Yes, I believe that is how it’s currently designed. But the problem is we are trying to market Peercoin as efficient. Exponentially increasing hash power is self-defeating when it comes to marketing Peercoin this way. It’s difficult to say with a straight face that Peercoin is saving the world electricity. That narrative will be challenged and criticized by people as long as PoW is part of the protocol. So, our question is, how much PoW inflation is enough before it’s ok to shut it off and switch completely to PoS?
This may be a spicy take, but I would say that this logic also applies to a non-trivial amount of minters with respect to PoW. Speaking for myself, I actually don’t really care about the “green” credentials of peercoin, I care much more about its provenance, utility, governance and scalability, which I believe are the things that actually create value for peercoin. What is the fraction of energy that peercoin uses compared to bitcoin? Once you exceed two or three zeros in the denominator, that is “green enough” for me. There is also the “inverse optics” problem that there is a significant cohort of people that think that PoS is intrinsically unfair because the “rich get richer” (even though we know they don’t on a real-terms basis). But as they say, having to explain it means you have already lost the argument. Keeping PoW helps allay these concerns very quickly.
I also don’t care too much about the green narrative. I’m not a big believer in climate change or anything like that. What personally matters to me is if the security protocol is sustainable. PoS being sustainable is my core concern, that it is inexpensive to participate and the reward will always be there to incentivize minters, unlike Bitcoin’s continuously decreasing block reward. I’m just saying that it does cut off a potential marketing avenue for people who do believe and care deeply about that issue.
Which I predict is on the scale of a rounding error. I seriously doubt there is much overlap between crypto supporters and people who care about climate change / sustainability.
I don’t agree with any one-time solutions. A small increase in inflation would act as an ongoing dilution for all inactive coins now and into the future. The “dead coins” are indeed an issue as they could pose a security risk. There is no way to guarantee that they are truly dead unless we make them so.
I did propose alsewhere adding a UTXO expiry of 15 to 20 years which would be the cleanest ongoing solution to this issue but it appears even more controversial than increasing inflation.
The whitepaper is old and we have changed the design multiple times since then. We ought to have a new whitepaper. If you want to go back to the original design, then we should have a 1% coinage reward but who here seriously wants to go back? The fact is, nothing is perfect and times change. For Peercoin to be successful, it needs to be adaptive. It’s just a question of getting people on-board.
The PoW inflation is still over 1% so it’s certainly still a problem. Why reward miners for offering no security? Minters should be rewarded for providing the security. There’s been plenty of time for people to buy up Peercoin at suppressed prices. As mentioned before, minters will not hoard Peercoin forever. If they make a profit, there is an incentive to sell.
I wouldn’t consider the examples in my OP “drastic”. If we remove PoW, then it is less substantial. Even the highest 3% option without PoW would increase inflation by 1.58% a year which is hardly drastic. The 1.5% option without PoW would decrease inflation with everything else equal.
It seems many people are not very concerned about increasing the chain security which is currently too low (10% with concentrated addresses that pose a risk, already spoken about). PoW adds inflation without security (apart from helping to dilute concentrated holders), and increasing PoS inflation, even slightly, should improve security.
People in the Bitcoin community do fear about old “whale” wallets becoming active and dumping the price. However, it is a much bigger concern for Peercoin because the PoS model depends upon distributed holdings and Peercoin is much more concentrated than Bitcoin. There is no comparison with Bitcoin.
Why play Russian roulette, when you can put an end the problem? Either, these are dead addresses, in which case there is no problem in diluting them or causing them to expire, or they are waiting in the shadows to come back, in which case they pose a threat.
If you use a rolling 3 or 6-month period, annualized PoW inflation is less than 1%. Not sure I would call this a “problem”.
Because as I said before, they help to distribute coins outside the existing minting class, and from a marketing angle, avoids the narrative that peercoin is just another “rich get richer” PoS scheme. It also allows people to receive coins without a third party, exchange or other intermediary. This is a valuable element to keep IMO.
Speak for yourself. I am still accumulating.
Sounds like FUD to me. Are you basing this on any actual precedent? Or are you just fear mongering/speculating?