[Debunked] Peercoin Banks that provide minting services, a possible problem?

General
1

[size=8pt]Disclaimer: Before buying an insane amount of peercoins, I want to be sure I’m not shooting myself in the foot. I’ve therefor started thinking about how I would go about killing Peercoin. Better to learn about it now when its still fixable. I love the coin, so it isn’t that… you know… just so you know :-*[/size]

Peercoin bank doing 51% attack?
I create a Peercoin Bank where I promise to safe-keep your coins. You take the offer because if coins are lost, they are actually covered by the insurance the bank have bought. You also do this because you earn an interest. The interest you earn is a steady stream of new coins, no matter how little coins you have deposited. This is possible because the bank have many customers and can create minting wallets were it keep coins for the purpose of minting. The rest of the coins are in hot wallets, which depositors can then use to make purchases with (which implies that they can spend some coins without actually ruining their minting stake). Since the minting wallet is big, variance decreases and there is a more reliant stream of new coins. Also, as a depositor you don’t have to worry about anything, don’t go through the “mess” of setting up minting and so forth and so on. The bank takes a small fee for its services and that’s how they make money.

Question:
Why is this argument flawed?

It is flawed and you don’t have to worry because (extracted from the thread and edited):

[ul][li]The Peercoin Bank would destroy its own business model and destroy future revenue. The profit motive for an attack is unclear. If the price goes down all coins kept in the reserve would go down in value, clients would close their accounts and it the value of the bank (shares outstanding or however you measure it) would likely go down.[/li]

[li]If Peercoin Bank’s are a way to make money, there will be many of them and thus the coins deposited in banks will be distributed and we avoid the concentration needed for the attack.[/li]
[li]If the Peercoin Bank is a legal entity (not hiding in the darkweb or similar) law enforcement can crack down on the operation.[/li]

[li]Large Peercoin investors will have an incentive to watch out for and the means to deploy capital for designing solutions to mitigate these kinds of risks.[/li][/ul]

2

I can think of two things. First, they’d basically be destroying their entire business, since it would revolve around Peercoin. Also, if Peercoin got to be so popular that a bank based its entire business around it, wouldn’t the people responsible for the act be risking imprisonment?

3

What annoys me the most is that it seems that it’s not 51% of total peercoins that are needed but only 51% of peercoins being actually minted (in hot wallets as cold storage minting is not possible at the moment).

Do we know what is the percentage of coins actually being minted? I feel like we could be suprised.

I’ve a few coins on some exchange at the moment, are they minting my coins for themself? Could they use my coins for a 51% attack?

I think PPC need to clarify all these points if it wants to get mainstream someday.

I’m a strong believer in POS cryto-coins but they probably still need to be improved.

4

I can tell you one way to help “kill peercoin”. Is to use stupid topic titles like this, so when someone comes to peercointalk, it says the recent posts are full of:

How to kill Peercoin
re: How to kill Peercoin
re: How to kill Peercoin
re: How to kill Peercoin

It’s an awful way of opening up a debate. Much of this discussion has already been discussed on this forum on way or another.

A better title for this topic thread might have been “Peercoin Banks that provide minting services, a possible problem?”

See how toned down that is, but it still gets to the point, and would still get the discussion going?

But HOW TO KILL PEERCOIN. The last thing we need is more FUD (Fear, Uncertainty and Death). It makes great conversation but scares people away while it is debated. Some new person comes here to find out what features peercoin has, and gets blasted in the face with “How to kill peercoin” all over the place. If it was me, I’d just click off this site and go investigate another coin to invest in…

I’m not participating in this discussion any further for this very reason. I’m not targetting you specifically pillow. It’s just that I see these types of topic subjects being entered every now and then, and it’s unnecessary FUD to see them show up in the latests posts like that unless absolutely necessary.

How about before choosing such an overly dramatic forum topic title, you think twice about it, before you shoot all of us in the foot at the same time?

Maybe I’m coming a little burnt out by overly participating in the forums lately. Small things seem to really get to me. I’m going to need another break soon.

  • ppcman
5

This is exactly why I moved away from Peercoin for now. I still highly believe in Primecoin though!

6

To calm down ppcman, I switched the topic title to the one he suggested. If you want another title pillow, let me know.

7

There is no 51% proof-of-stake situation, because of CHECKPOINTING.

This is exactly why I moved away from Peercoin for now. I still highly believe in Primecoin though![/quote]

People amaze me. On one hand, they freak out because we have checkpointing. When they are not freaking out about that, they’re panicking about 51% attacks instead.

You cannot have a 51% PoS attack when checkpointing is still enabled.

Checkpointing won’t disappear until Sunny is satisfied that the network holds its integrity.

Please stop the FUD… Peercoin’s network is still stable, and people can sit here all day long and talk about “What if this?” and “What if that”…

If you keep spreading FUD, it just makes Peercoin cheaper for the rest of us who want a bigger position before the rest of the world sees the opportunity.

It’s simple. Peercoin has Proof-of-work, Proof-of-stake AND Checkpointing. All 3 of these makes the network stable, and nothing has changed with that in 0.4. We’ll continue to be stable.

Peercoin’s network is expensive to attack with it’s 0.01 transaction fee per kb. Even if you try, you’ll fail, and end up costing yourself a lot of money.

Attackers are attacking OTHER coins instead. We’re currently safe for these reasons. All of this was foresight in advance by Sunny King. He knows what he is doing.

8

No problem, Im perfectly fine with changing the title. I dont want people thinking that there is ann issue with this already. The only reasonn I even raise the question is that I never want anything happen to my investment, so I want to know as much as possible. From Bitcoin I learned that there are issues with the implementation but just because people do not want to recognize that or even think along those lines, Im thinking that Bitcoin will fail or at least loose tremendously in market cap.

I’ve not spotted anything in Peercoin that concerns me. I will keep thinking and lookinf and hope I never find anything.

9

[quote=“ppcman, post:4, topic:2156”]I can tell you one way to help “kill peercoin”. Is to use stupid topic titles like this, so when someone comes to peercointalk, it says the recent posts are full of:

How to kill Peercoin
re: How to kill Peercoin
re: How to kill Peercoin
re: How to kill Peercoin

It’s an awful way of opening up a debate. Much of this discussion has already been discussed on this forum on way or another.

A better title for this topic thread might have been “Peercoin Banks that provide minting services, a possible problem?”

See how toned down that is, but it still gets to the point, and would still get the discussion going?

But HOW TO KILL PEERCOIN. The last thing we need is more FUD (Fear, Uncertainty and Death). It makes great conversation but scares people away while it is debated. Some new person comes here to find out what features peercoin has, and gets blasted in the face with “How to kill peercoin” all over the place. If it was me, I’d just click off this site and go investigate another coin to invest in…

I’m not participating in this discussion any further for this very reason. I’m not targetting you specifically pillow. It’s just that I see these types of topic subjects being entered every now and then, and it’s unnecessary FUD to see them show up in the latests posts like that unless absolutely necessary.

How about before choosing such an overly dramatic forum topic title, you think twice about it, before you shoot all of us in the foot at the same time?

Maybe I’m coming a little burnt out by overly participating in the forums lately. Small things seem to really get to me. I’m going to need another break soon.

  • ppcman[/quote]

I hear you. Please let me explain myself. I wanted a general/abstract/dry enough title, so that I could collect all of the attack vectors, instead of creating many different threads concerning these kinds of issues. I could have done a much better job coming up with a proper name. I understand that now. No I don’t want to shoot either you or myself in the foot, so your point is well taken. I don’t want FUD only a rational explanation to why these attack vectors are of no concern. If I (or someone else) manage to come up with something that is of concern but that can be fixed, I want it to be known before the checkpointing is removed.

10

[quote=“ppcman, post:7, topic:2156”]There is no 51% proof-of-stake situation, because of CHECKPOINTING.

This is exactly why I moved away from Peercoin for now. I still highly believe in Primecoin though![/quote]

People amaze me. On one hand, they freak out because we have checkpointing. When they are not freaking out about that, they’re panicking about 51% attacks instead.

You cannot have a 51% PoS attack when checkpointing is still enabled.

Checkpointing won’t disappear until Sunny is satisfied that the network holds its integrity.

Please stop the FUD… Peercoin’s network is still stable, and people can sit here all day long and talk about “What if this?” and “What if that”…

If you keep spreading FUD, it just makes Peercoin cheaper for the rest of us who want a bigger position before the rest of the world sees the opportunity.

It’s simple. Peercoin has Proof-of-work, Proof-of-stake AND Checkpointing. All 3 of these makes the network stable, and nothing has changed with that in 0.4. We’ll continue to be stable.

Peercoin’s network is expensive to attack with it’s 0.01 transaction fee per kb. Even if you try, you’ll fail, and end up costing yourself a lot of money.

Attackers are attacking OTHER coins instead. We’re currently safe for these reasons. All of this was foresight in advance by Sunny King. He knows what he is doing.[/quote]

I really don’t want to spread FUD at all, I’m just trying to identify PPC weaknesses in order to improve it. I personally hold a few PPC and think that POS coins are the future.

Your anwsers seem to show that everthing relies on Sunny King (checkpointing and all). What if something wrong happens to him?

11

[quote=“Ken”]As I see it, one bank will not be able to gain enough marketshare to be a threat because other banks will quickly copy their successful model and competitively undercut their fees or provide better service. But, let’s say they did luckily grow huge fast (i.e., first-mover velocity) and always had the intent to kill Peercoin (even if operating at a loss). What would it serve? First of all it would kill that bank and a lot of time, effort and even its own capital would be gone. But, let’s say an evil government or competing crypto was always behind and supporting that fake bank and was okay with losing all that. And let’s say they succeed.

What would keep Peercoin II from appearing a week later?

What did they succeed in doing? Lowering the public opinion of such a ‘store of value’ crypto and hoping the public stays away from buying similar kinds?

Here’s another thing:

The more time goes by, the more there will be powerful and large investors (individuals and businesses) who do not want Peercoin to be destroyed or vulnerable. They will watch for and dismantle scenarios that put their investment at risk. For self interest they will design solutions to keep singular entities from being able to undermine the Peercoin network (Bitcoin can’t do this because its core design ironically created a conflict of interest that locks in both future failure and current denial).

Anywhoo. Just my thoughts. Great question pillow! : )[/quote]

Great response Ken. I will attempt a summary of your post along with some other comments people have offered and add some of my own.

Why you don’t have to worry:

[ul][li]The Peercoin Bank would destroy its own business model and destroy future revenue. The profit motive for an attack is unclear. If the price goes down all coins kept in the reserve would go down in value, clients would close their accounts and it the value of the bank (shares outstanding or however you measure it) would likely go down.[/li]

[li]If Peercoin Bank’s are a way to make money, there will be many of them and thus the coins deposited in banks will be distributed and we avoid the concentration needed for the attack.[/li]
[li]If the Peercoin Bank is a legal entity (not hiding in the darkweb or similar) law enforcement can crack down on the operation.[/li]

[li]Large Peercoin investors will have an incentive to watch out for and the means to deploy capital for designing solutions to mitigate these kinds of risks.[/li][/ul]

I’ll be updating the first post, so that people don’t have to go through the entire thread to find the answers.

12

There is a multitude of solutions:

  1. CURRENT DEVELOPMENT: We already have developers making suggested commits to Peercoin

  2. NEW DEVELOPERS: Sunny King himself is getting ready to bring on new developers to the project. He wants this… In 2014 you will see this happen if Sunny holds true to his word (which I believe he will).

  3. MATURE NETWORK: Even if checkpointing died tomorrow because Sunny died. The network is probably mature enough to handle it. Some people don’t think so. I am one who does. The only way to prove it is to see it.

  4. COIN FORK: The coin could fork under sigmike, or fuzzybear’s control. I’m sure even Jordan Lee would hop on board. Plenty of people willing to adopt it.

  5. COMMUNITY PARTICIPATION: All of this is speculation again. Sunny King isn’t dead. Even if he was, the community would pick up the reigns and run with this and keep it on track.

WHAT DOES THIS ALL MEAN?

Peercoin’s network is safe and stable. PPC is cheap now. I believe the price of PPC will never be this low again in the coming months. In my opinion it is going to have a huge following and major development this year. You are either IN or you are OUT. The best time to get IN must be now I think… I don’t believe you can wait it to get much cheaper.

Disclaimer: I hold peercoin. Not nearly as much as most people on this forum, but I do hold some. I’m keeping it for the long term. You do what you think is right. Everything I talk about is self-learned by reading hundreds of posts and investigating the code myself. I’m not an insider. Any one with enough time and dedication could discover the things I know. Please do your own diligence and stop listening to FUD. :slight_smile:

I honestly believe there are people purposely talking against Peercoin to throw off the scent of something big that is brewing while they buy a better position on the dips and lows. It’s sad, but that’s how people act when something like this goes unnoticed. I probably shouldn’t even be talking about it, because I need to have a better position myself. These are my own thoughts and ideas. Take caution with your own trades. :slight_smile:

13

[quote=“ppcman, post:7, topic:2156”]There is no 51% proof-of-stake situation, because of CHECKPOINTING.

People amaze me. On one hand, they freak out because we have checkpointing. When they are not freaking out about that, they’re panicking about 51% attacks instead.

You cannot have a 51% PoS attack when checkpointing is still enabled.

Checkpointing won’t disappear until Sunny is satisfied that the network holds its integrity.

Please stop the FUD… Peercoin’s network is still stable, and people can sit here all day long and talk about “What if this?” and “What if that”…

If you keep spreading FUD, it just makes Peercoin cheaper for the rest of us who want a bigger position before the rest of the world sees the opportunity.

It’s simple. Peercoin has Proof-of-work, Proof-of-stake AND Checkpointing. All 3 of these makes the network stable, and nothing has changed with that in 0.4. We’ll continue to be stable.[/quote]

I have not seen anyone freaking out and panicking over checkpointing, 51% attacks, etc. People, myself included, are asking questions so that we can better understand this complex new technology

People are less concerned with risk than they are with ignorance of those risks. Known risk is manageable, unknown risk is not

Fear-Uncertainty-Doubt will not grow in places where people are free to ask and answer questions on subjects that concerns them. If, however, we have the creation of “no go” topics, FUD will increase

I believe we will benefit from MORE questions that invite criticism of Peercoin since, by definition, we get more answers

14

[quote=“ppcman, post:7, topic:2156”]There is no 51% proof-of-stake situation, because of CHECKPOINTING.

This is exactly why I moved away from Peercoin for now. I still highly believe in Primecoin though![/quote]

People amaze me. On one hand, they freak out because we have checkpointing. When they are not freaking out about that, they’re panicking about 51% attacks instead.

You cannot have a 51% PoS attack when checkpointing is still enabled.

Checkpointing won’t disappear until Sunny is satisfied that the network holds its integrity.

Please stop the FUD… Peercoin’s network is still stable, and people can sit here all day long and talk about “What if this?” and “What if that”…

If you keep spreading FUD, it just makes Peercoin cheaper for the rest of us who want a bigger position before the rest of the world sees the opportunity.

It’s simple. Peercoin has Proof-of-work, Proof-of-stake AND Checkpointing. All 3 of these makes the network stable, and nothing has changed with that in 0.4. We’ll continue to be stable.

Peercoin’s network is expensive to attack with it’s 0.01 transaction fee per kb. Even if you try, you’ll fail, and end up costing yourself a lot of money.

Attackers are attacking OTHER coins instead. We’re currently safe for these reasons. All of this was foresight in advance by Sunny King. He knows what he is doing.[/quote]
You may be right, but I also heard that the checkpoint is a big turn off for some potential investors. Because people do not want the developer have too much control on their investments.

15

There is a multitude of solutions:

  1. CURRENT DEVELOPMENT: We already have developers making suggested commits to Peercoin

  2. NEW DEVELOPERS: Sunny King himself is getting ready to bring on new developers to the project. He wants this… In 2014 you will see this happen if Sunny holds true to his word (which I believe he will).

  3. MATURE NETWORK: Even if checkpointing died tomorrow because Sunny died. The network is probably mature enough to handle it. Some people don’t think so. I am one who does. The only way to prove it is to see it.

  4. COIN FORK: The coin could fork under sigmike, or fuzzybear’s control. I’m sure even Jordan Lee would hop on board. Plenty of people willing to adopt it.

  5. COMMUNITY PARTICIPATION: All of this is speculation again. Sunny King isn’t dead. Even if he was, the community would pick up the reigns and run with this and keep it on track.

WHAT DOES THIS ALL MEAN?

Peercoin’s network is safe and stable. PPC is cheap now. I believe the price of PPC will never be this low again in the coming months. In my opinion it is going to have a huge following and major development this year. You are either IN or you are OUT. The best time to get IN must be now I think… I don’t believe you can wait it to get much cheaper.

Disclaimer: I hold peercoin. Not nearly as much as most people on this forum, but I do hold some. I’m keeping it for the long term. You do what you think is right. Everything I talk about is self-learned by reading hundreds of posts and investigating the code myself. I’m not an insider. Any one with enough time and dedication could discover the things I know. Please do your own diligence and stop listening to FUD. :slight_smile:

I honestly believe there are people purposely talking against Peercoin to throw off the scent of something big that is brewing while they buy a better position on the dips and lows. It’s sad, but that’s how people act when something like this goes unnoticed. I probably shouldn’t even be talking about it, because I need to have a better position myself. These are my own thoughts and ideas. Take caution with your own trades. :)[/quote]
I guess the price of ppc will go down a little further in coming days when China central bank confirms the ban. I also hold some ppc and is looking to buy some more when the price go down further. May be around $1.

16

There is a multitude of solutions:

  1. CURRENT DEVELOPMENT: We already have developers making suggested commits to Peercoin

  2. NEW DEVELOPERS: Sunny King himself is getting ready to bring on new developers to the project. He wants this… In 2014 you will see this happen if Sunny holds true to his word (which I believe he will).

  3. MATURE NETWORK: Even if checkpointing died tomorrow because Sunny died. The network is probably mature enough to handle it. Some people don’t think so. I am one who does. The only way to prove it is to see it.

  4. COIN FORK: The coin could fork under sigmike, or fuzzybear’s control. I’m sure even Jordan Lee would hop on board. Plenty of people willing to adopt it.

  5. COMMUNITY PARTICIPATION: All of this is speculation again. Sunny King isn’t dead. Even if he was, the community would pick up the reigns and run with this and keep it on track.

WHAT DOES THIS ALL MEAN?

Peercoin’s network is safe and stable. PPC is cheap now. I believe the price of PPC will never be this low again in the coming months. In my opinion it is going to have a huge following and major development this year. You are either IN or you are OUT. The best time to get IN must be now I think… I don’t believe you can wait it to get much cheaper.

Disclaimer: I hold peercoin. Not nearly as much as most people on this forum, but I do hold some. I’m keeping it for the long term. You do what you think is right. Everything I talk about is self-learned by reading hundreds of posts and investigating the code myself. I’m not an insider. Any one with enough time and dedication could discover the things I know. Please do your own diligence and stop listening to FUD. :slight_smile:

I honestly believe there are people purposely talking against Peercoin to throw off the scent of something big that is brewing while they buy a better position on the dips and lows. It’s sad, but that’s how people act when something like this goes unnoticed. I probably shouldn’t even be talking about it, because I need to have a better position myself. These are my own thoughts and ideas. Take caution with your own trades. :)[/quote]

Hey, that’s a good bullet list you got there!

I like how you guys n girls debate things here and on Reddit
One of the things that actually sparked my interest in Peercoin was and still is that people are open to debate and not afraid of a good argument. That said, I do understand the downside of having threads like this one popping of every so often.

A good solution to this, I think, is to welcome all critique and debate the facts. If something is wrong with the protocol, the protocol should be changed. If something is not wrong, then the critique can be dismissed and archived.

http://peercoinmyths.com/ is a good idea I think
I think it would be awesome to have an archive of things that have been debated already and then when those same questions materializes again (as new threads) they could be moved to another board with a comment and reference to where this question have already been discussed. No, I didn’t event this myself. Actually one of the things that turned me on to Peercoin was site this http://peercoinmyths.com where I very quickly could get an overview over the main concern people have and how the community look at them.

Adding to such a list, would then simplify the work of “rejecting” FUD threads and honest questions from worried people, at the same time people who are worried get an answer. I think the checkpoint thing, is one of those and concerning that particular one I myself got some valuable info when I knew less then I know now.

Price:
No, no, no, you can’t trick me into going that off-topic in my own thread! :wink:
Visit this one instead: Cryptoblog - notícias sobre bitcoin e criptomoedas!
(Yes I think the price is fair right now, yes I think it could go down more, yes I’m guessing)

17

There is a careful balance where enough questions to make Peercoin transparent is a good thing.

VS

Too many chronic questions, which makes it appear on the surface that Peercoin is in a constant state of controversy with multiple circular debates on how it works.

A new person walks in the room and hears every one in uproar arguing on how things work. They are likely to turn around and walk out. I believe this is occurring right now.

18