Could someone clarify PoW to me in PPC? Lets say in the future that 90% of the PoW miners leave and difficulty drops. Will more coins be minted again via PoW or do the coins minted via PoW stay at the level of the maximum difficulty of the network?
If difficulty drops, then more coins will be minted.
Hashrate and difficulty are influenced by two major shifts:
a) Development of new technology, like ASICS now
b) Price of the coin. The higher the price the higher will be the hashrate and difficulty.
I think Moore’s law will act such that a few POW miners will be enough to keep the difficulty level extremely high in today’s standard, hence leaving the profit margin of POW mining razor thin. Today POW minting rate is 40 times that of POS ( http://cryptometer.org/ppcoin_104_week_charts.html ), if POW hashing power increases 100% compared to POS every 6 months, we are 40/2*6/12 = 10 years from break even.
If difficulty drops, then more coins will be minted.
Hashrate and difficulty are influenced by two major shifts:
a) Development of new technology, like ASICS now
b) Price of the coin. The higher the price the higher will be the hashrate and difficulty.[/quote]
I thought that if difficulty drops it will be easier for all other miners to mint the same amount of coins. More coins overall aren’t made by faster mining.
The POW difficulty has been pretty stable over the last 3 months, does it mean that PPC will never be a real POS coin, more coins being mined than minted ?
By the way, is POW mining still needed now that we have more than 21 millions PPC in circulation?
Thanx for your answers.
Peercoin will always be a hybrid pos/pow coin. Based on Moores law it can be safely said that in time the pow inflationary factor is to be neglectable.
Peercoin does not have a hard limit as opposed to bitcoins 21M. Nevertheless, it can even shrink in time if more transactions(fees) are destroyed than newly created by either pos/pow mechanism.
For now when looked at the inflation rate, it can be said that peercoin has a lower inflation rate than bitcoin (~4.5% vs ~15%).
Why not totally disable POW at that time then? Why waste all that energy? POS should be enough.
It shouldn’t be too much of a problem to disable POW, what do you think?
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.
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]
Don’t you think there is already a majority of POS minting nodes?
I guess there is no easy way to estimate the number of mining and minting nodes.
But as POW mining isn’t used to secure the network, it it really a problem?
We probably only need a majority of the POS minting nodes to switch to the new version, am I right? Just asking.
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]
Don’t you think there is already a majority of POS minting nodes?
I guess there is no easy way to estimate the number of mining and minting nodes.
But as POW mining isn’t used to secure the network, it it really a problem?
We probably only need a majority of the POS minting nodes to switch to the new version, am I right? Just asking.[/quote]
Hey Sunny, what’s your point of view about that? Don’t you feel that PPC will still mainly be a POW coin for years to come?
I don’t think mining pools has as a strong voice in this matter like in bitcoin, especially PoW does not play a security role for the network. So it’s certainly possible to disable PoW if that’s the community consensus.
Although there is no such plan at the moment. Peercoin’s inflation rate is already lower than bitcoin’s.
[quote=“Sunny King, post:11, topic:807”]I don’t think mining pools has as a strong voice in this matter like in bitcoin, especially PoW does not play a security role for the network. So it’s certainly possible to disable PoW if that’s the community consensus.
Although there is no such plan at the moment. Peercoin’s inflation rate is already lower than bitcoin’s.[/quote]
Thanx Sunny for your clear answer.
I have no enthusiasm whatsoever for PoW. It is just an energy wastrel!
On the other hand I am concerned that 21 million coins is a very small number of coins for a world with 7 billion people and growing. Even though Peercoin is highly divisible, I wish Peercoin had more coins in existence.
The only way significant new Peercoin is being generated right now is through PoW. Which is not so cool. I wonder about other ways of increasing the coin supply. The 1% minting is not going to get us there. If PoW were discontinued (Yay!) then how could the coin supply be expanded?
If we were a company and we wanted more stock we would do a stock split. One existing share now becomes X number of new shares.
Could Peercoin possibly do a coin split?
For example, each currently existing 1 Peercoin on some certain date becomes 10 new Peercoins. All of a sudden Peercoin would have 210 million coins not 21 million.
Of course, the price of Peercoin will adjust accordingly - more or less. Sometimes with companies splitting stocks in this way causes a boost in the overall market cap.
If possible, executed well and persuasively marketed this could also give Peercoin a desirable publicity boost.
Edit: I would like to remove PoW right away, but I am not saying or suggesting we do a coin split anytime soon, I would think a coin split might be farther down the road when the price is much higher. 
Just food for thought.
I think PoW is still essential to ensure fair distribution. You can look at it as a crowd sale that is still ongoing
I think PoW is still essential to ensure fair distribution. You can look at it as a crowd sale that is still ongoing :)[/quote]
I am all for fair distribution but I don’t think PoW gets us there.
What is fair about it? You spend large amounts of money to buy specialized hardware that has no other use than burning giant amounts of electrical power to get you Peercoin. The Peercoin is likely little to no more than you would get by just buying it on the open market and to boot you are fouling the atmosphere with unnecessary power generation. What is fair about that?
If we had clean thorium nuclear power or distributed solar on every roof and much improved batteries in the houses then that would be one thing, the energy burned would be clean energy, but that is not what we have. Proof of Work is primarily burning lots of coal and shooting large amounts of ash et.al. into the atmosphere, even if it is done in hydroelectric regions, the power deficit needs to be made up and that is done primarily in dirty ways.
I don’t see Proof of Work as fair distribution going forward, nor is it ethical. Just my opinion, what say you?
I think that the environmental issue and fair distribution are two separate things. The great thing with PoW is that you can run a “crowd sale” for many years and that no one directly rake in any profits. The “crowd sale” also runs after the coin is launched and this ensures that people can try before they buy. If we want Peercoin to succeed and take market share from pure PoW coins, it must be fairly distributed. So I think that PoW is necessary for Peercoin to succeed and reduce the carbon footprint of pure PoW coins.
I agree with you that environmental issues and fairness of distribution are two separate things. So, lets just set the environmental issues aside. I think they are important but I am willing to set these issues aside to simplify the argument for now. If it were necessary to burn the electricity to provide security for cryptos then I would consider this to be a reasonable expense for a grand experiment. But it is not necessary. As you know Peercoin gets 100% of its security from PoS.
So, environmental issues aside, it just comes down to economics. Right now new Peercoin is created by PoW, but we don’t have to do that. We could stop PoW today and generate any amount of new Peercoin by way of coin splitting as I set forth a few posts earlier. I would love to have Sunny weigh in on the feasibility of that idea. If it is possible then we don’t have to have PoW to create new Peercoins. So then it really is just truly economics…
I presume from your position that you are a PoW miner. I have an ASIC miner that I don’t even run. It represents an economic loss to me. Can you tell me how much is your electric cost for how many Peercoin you receive?
Right now, as I write this, you can purchase Peercoin for $1.04. For a dollar and four cents in electricity can you win a full Peercoin?
Coin splitting is not ensuring fair distribution since everyone retain their share. PoW is needed to avoid crowd sales where all coins are sold for 21 BTC in a matter of weeks and only the developers have in depth knowledge about the project. I have never mined any peercoins and I have never seen an ASIC in real life, but I am a firm believer in PoW as the fairest way to distribute a coin.
Initial distribution for all cryptos is problematic, but the initial distribution for Peercoin is done long ago. PoW miners got everything, how is that fair? But, it is water under the bridge as is the Nxt initial distribution that you refer to, which I am not defending. These initial distributions are all in the past. Peercoin is slowly being more well distributed by open public sales on exchanges such as BTC-e and the like, which is as fair as we are getting for now so far as I can tell. How does PoW have anything fair about it for Peercoin going forward?
Alot of people in the world have not yet heard about Peercoin. PoW should be running for atleast 10 more years in my opinion. Yes, PoW miners got everything, but they also had to sacrifice time and energy to get them. They did not get them for free.