Can we start a discussion on what are the fundamental differences between Peercoin and some of the other proof of stake coins? NAV has a double blockchain, and there seem to be higher minting percentages paid to stake other currencies. What is the main draw for PPC?
I’d like to answer, but do not know enough about other coins to make a comparison.
Higher minting rewards is a red-herring, since more inflation simply reduces the worth of each coin.
Perhaps we need a table for all top POS coins, which an indication of minting rewards, inflation rate, distribution, offline minting, etc.
Peercoin has a fixed payout for POS. It is set at 1% annually. The key word here is fixed and also it is there not to attract holders who want high payout but want a low inflationary coin that can be used as a settlement base coin.
I dont know other pos coins so I am not able to make a comparison with others.
People who promote PoS coins with increased minting rewards are doing it either because they think it will improve the incentive for people to stake with their coins or simply because they’re concerned more with making a profit and not what is best for the network.
A high minting reward benefits stakers at the expense of coin holders who have not begun staking yet. This centralizes the network into the hands of stakers over time. For example, if the minting reward is set at 10% annually, non-stakers will lose 10% of the value of their investment per year.
Increasing the mint reward would funnel value much faster from non-stakers to stakers, resulting in centralization of the coin supply. Non-stakers would keep the same amount of coins while stakers would drastically increase the number of coins they own every year.
This does not make for a network that acts as a proper store of value. Further, not everyone should be required to mint if they don’t want to. Forcing them to do so by making them lose significant value every year will likely just result in pushing non-stakers away to networks with more sustainable inflation rates. This is why Peercoin maintains its PoS inflation rate at a low 1%. Increase the rate too much and it becomes a burden.
Non-stakers are not the only group it would affect as well. There are not enough blocks in a year to accommodate everyone, so people with smaller amounts of coins would end up losing out if it takes them longer than a year to mint a block. A smaller PoS inflation rate like 1% would minimize this effect. Pooled minting would benefit stakers with smaller amounts of coins, but that is not on the radar yet.
Lastly, it would also punish the market cap and traders as people continuously mint lots of coins and sell them on exchanges for profit. Increasing the mint rate is short-term thinking. It may sound attractive at first, but the long-term negatives far outweigh the benefits. Peercoin has been doing it right from the start.