Discussion, re: lowering PoW reward since fair distribution is a success

General
11

Rather than an arbitrary POW haircut perhaps we should look at directly linking POW difficulty with POS difficulty. If mining rewards become more scarce as minting increases then current stakeholders can “vote” for decreasing the proportion of POW rewards by putting more of their holdings to work in securing blockchain. As it is right now, POW and POS difficulties are largely independent and only POW leads to profit while POS simply matches inflation.

Another consideration would be to simply make POW difficulty unidirectional. Since block timing doesn’t depend on POW, the protocol could mandate that once miners hit a certain difficulty, they will have to at least reach that same difficulty again in order to continue minting no matter how long it takes. Along with the existing diminishing POW rewards at higher and higher difficulties, each generation of miners would eventually be priced out of the market while blockchain security would never suffer thanks to POS.

On the other hand, POW has thus far been very good for Peercoin because it keeps a steady supply on the market. A supply shock would surely boost PPC price in the short term but would quickly evaporate the market and lead to a bubble. Peercoin is not a pump-and-dump. Don’t be deceived by the nearsighted misappropriation of values at Coinmarketcap. Clearly a majority of current “investors” don’t even perceive the concept of “fair distribution.” In any case, I believe that it is still several years too early to refer to distribution as a “success” as if in the past tense anyway.

In my opinion, whether POW rewards are modified or not, the growth of Peercoin will derive more from recognition of its utility and accessibility (through endeavors like PeerAssets and PeerKeeper) than from exclusivity. SK has brilliantly designed supply to decrease in proportion to velocity through the .01 mandatory fee. If you want to see PPC priced higher, we should work on getting Peercoin into more hands rather than fewer.

12

Very good analysis learnmore. I agree with your assessment on the issue.

13

I am against disbanding PoW. I agree with Learnmore on the benefits of PoW. PoS coins usually have got very low volume, so new coins are important for having a decent trade volume. Just look where Copycats like Blackcoin, Mintcoin or Hyperstake have gone, which disbanded PoW very early on.

And the distribution still needs to improve. 8,500,000 Peercoin is sitting in the TOP 5 addresses.


That is more than one third of all peercoin.

Instead of simply disbanding PoW, I would favour a self-funding model for Peercoin like many other coins have it, for example Decred or Zcash. We could cut the mining rewards by 50%, and use the other 50% to finance development and marketing. Of course, it has a risk of corruption as it always needs trusted members of the community to control the private keys of the recipient addresses, and to fairly distribute the generated PPC to those ones who are doing work for Peercoin.
Even if it just ends up in paying for Peercoin banners on some websites, that’s still better than to reward random miners.

14

I was reminiscing over the 3 years that I have been a member of this community. Not exactly there yet… celebrating the anniversary next week. I was thinking of all the threads about PoW that have appeared during the 3 years. Then I check the forum and notice a new one.

I thought it would be beneficial to reference an old thread over the debate of the future of PoW.
https://www.peercointalk.org/index.php?topic=779.0

There are more threads with valuable discourse over this important topic. Some of these community members may have left or gone silent for the time being. Much can still be learned from their opinions.

As for the topic at hand. I am generally for the reduction of the PoW reward. A cost-benefit analysis would be a good measure to determine whether it is worthwhile to lower the PoW reward.

15

I don’t support any changes to PoW system.
This means I also disagree linking the PoS and PoW difficulty.

First of all, we want stability. Manipulating the algorithms is dangerous.

Lowering the reward won’t affect the profitability as the profitability is directly linked to the bitcoin mining profitability. It will just result in lower hashpower and therefore more PoW blocks compared to PoS blocks.
But maybe that’s what your after, more PoW blocks for more chain security?

Linking PoS and PoW difficulty is very dangerous. As the PoS difficulty would directly manipulate the PoW profitability. This can swing two ways. Either, PoW becomes so unprofitable that mining stops, or PoW becomes so profitable that or hashpower skyrockets together with our inflation.

So no changes for me.

16

The biggest challenge to doing this is that it requires a hard fork, to which all (or the majority of) nodes must update. In this case, there is an incentive for mining nodes to not update, because it reduces their revenue. Without the support of mining nodes, the update may not be successful, splitting the network.[/quote]

The community must come to a consensus on such a major overhaul of the network. As Chronos mentioned previously the hard fork could be dangerous given the incentives of the miners and those who do not agree with the decision.

It seems disabling PoW discussions are brought up debated and then pushed off to a later date. At what point will it be worthwhile to disable PoW? If not now when?

17

[quote=“hrobeers, post:15, topic:4096”]Linking PoS and PoW difficulty is very dangerous. As the PoS difficulty would directly manipulate the PoW profitability. This can swing two ways. Either, PoW becomes so unprofitable that mining stops, or PoW becomes so profitable that or hashpower skyrockets together with our inflation.

So no changes for me.[/quote]
Sorry, I meant earlier that PoS diff and PoW reward are linked. Which they are since the dawn of peercoin.

PoW reward is halfed every time PoS hash rate grows by the factor of 16.

Lines 829 and following of main.cpp are the ones I’m referring to.

18

Wrong, it is like this:

PoW reward is halfed every time PoW hash rate grows by the factor of 16.

19

Wrong, it is like this:

PoW reward is halfed every time PoW hash rate grows by the factor of 16.[/quote]
Yep, wow.

I believed it to be different for … two years?

What a day.

Willy out.

20

Here is some proof, this is me mining testnet with an ASIC.

multiple blocks in one second, you can see the reward drop steadily.

21

Wrong, it is like this:

PoW reward is halfed every time PoW hash rate grows by the factor of 16.[/quote]

The reward is inversely proportional to the PoW difficulty rather than the hash rate.

22

true, because the hashrate is not know. It is estimated based on the difficulty.

23

The biggest challenge to doing this is that it requires a hard fork, to which all (or the majority of) nodes must update. In this case, there is an incentive for mining nodes to not update, because it reduces their revenue. Without the support of mining nodes, the update may not be successful, splitting the network.[/quote]

The community must come to a consensus on such a major overhaul of the network. As Chronos mentioned previously the hard fork could be dangerous given the incentives of the miners and those who do not agree with the decision.[/quote]

I do not believe that miners have political power in Peercoin. The number of nodes is irrelevant and extremely easy to manipulate. What is relevant is the number of blocks, and PoS has an overwhelming majority here - meaning that unless there is a significant part of economic relevance (users, minters) which decides to stay on the (current) network, the hard fork will activate cleanly, and the then old network will be abandoned, and become worthless. The only thing that matters is consensus among users.

24

True. Miners have not political power in Peercoin. Even having all the hashrate centralized in a single pool, the mined blocks in POS are majority
The amount of Peercoin that belongs on PeercoinMillionaires is much more dangerous. I think, only with first 5 of them (who get the majority of Blocks) can make a fork. They 5 have more political capacity that all miners together. Is that Iquality?
Equality will be the equitable distribution, POW achieves it

(sorry for my bad english)

25

Still there is a possibility for revolution.
Just look at: https://discuss.nubits.com/t/augeas-launch-and-network-status/4692

26

It’s true, if the community is forking over protocol you can create a new chain with a particular initial distribution to a snapshot of addresses that exclude those that minted with the new protocol. Forking over real philosophical differences can happen with any blockchain.

27

[size=12pt]What has always impressed me about the Peercoin community, is the amount of saavy and intelligent people attracted to this project.

Great discussion. Let’s not end it here.[/size]

While we have this attention, one of the foremost problems now, is that the cryptocommunity at large seems to shun our project based on coinmarketcap.com values, internet visibility via marketing, and promotion.

Normally Sunny King never talks about today’s price, because that is not what drives the importance of this project long term.

But a key aspect of this project is the current trading price for adoption and participation. I sincerely believe it is time to come up ways with boosting our visual presence.

Asking for donations to market the coin is a temporary solution. We need a better long term, ongoing plan, to fund this…

So if PoW modification doesn’t work, we’re going to have to find something that will.

Any one reading this, feel free to suggest some ideas… :slight_smile:

The rich list is not some thing that is going to change. We don’t even know who holds those coins, and if any of the owners of them have died and taken their keys to the grave. That happens.

What we can focus on, is new coin generation and PoW seems like the most obvious target.

Failing that… what else can be done?

Here’s an abstract concept. Don’t shoot it down. I already know it has holes in it. But the brainstorm idea gets you thinking outside the box.

[size=12pt]Brain exercise (not to be taken seriously):[/size]

  1. Let’s say Sunny King can resdesign the code to use the Checkpoint private key to sign blocks which generate new Peercoins.

  2. These signable new Peercoins can happen upon Sunny King’s authorization.

(I know, I know… I’ve lost every one at this point. Just read 3. and 4.)

  1. A trusted pool mines Bitcoin chain. It uses its hash power to award users with Sunny King Signed and Generated peercoins

  2. This solves two issues:

    a) The official pool uses these Bitcoins towards marketing and promotion of Peercoin
    b) The pool miners obtain Peercoins, which is their goal anyway.

    Peercoin benefits from new Bitcoin funds to spend, Miners benefit from Peercoins they want

    I’ve always hated the idea of selling Peercoin, to market peercoin. That’s counter productive in my opinion.

Now I know it creates a flood of other issues. So this isn’t the idea. But this is the whimsical way my brain is trying to think outside the box on how to accomplish spendable marketing funds, at the same time, still awarding Peercoins.

Politically this is seriously incorrect. As a trustless system, this is seriously incorrect. As a great idea, this is seriously incorrect.

I know.

…but you can see how inventing these silly ideas… might yield a golden nugget of a great idea if we let our minds wander.

That’s all…

Unfortunately it is always easy to spot what won’t work. It’s extremely difficult to discover what will.

28

I agree. And even if we had equitable distribution now, PoW would achieve to keep it. Fair distribution should take place continuously and unendingly to help prevent future centralization of power in the hands of few people.

29

Is Sunny no longer concerned with the governance of the protocol?

30

No, I would not suggest that at all.

Here’s what I can tell you from what I’ve learned over the years.

Sunny King does what he does best. He codes, he designs things that are solid, and that will withstand the test of time.

He expects that they will gain traction by intelligent people, who will form a community and take his creations and utilize them.

I fully believe he reads our banter, but rather than interject or control the discussion, he lets us hash things out, and reach a consensus on our own. That’s a smart stance to take.

He simply put out in his last weekly update that PoW was a subject of discussion… and by doing so, he figured Peercoin supporters, like myself, might pay attention to it, and initiate a discussion. It is a worthy discussion.

So no, I do not think that Sunny is no longer concerned with the governance of the protocol.

What he is interested in, is the community views of the subject, and that’s why he simply mentioned it.

To be fair to Peercoin itself, we should address these issues from time to time, as things evolve. That’s only due diligence by the community at large.

:slight_smile: