General Thoughts on PPC

I was glad to find this PPC oriented forum, great work FuzzyBear. Hopefully we will not have any more hiccups with the site going down. We need a PPC specific forum as bitcointalk is being overloaded with new topics and other Alt-Currencies. Just wanted to offer some comments that I have about PPC. I am not asking for any specific answers and it is not my intent to put anyone on a spot, just wanted to share few thoughts.
What I don’t like about PPC:

  1. I would argue that to this point PPC has a single point of failure: Sunny King. By visiting bitcointalk I understand that he discusses solutions with other programmers & the PPC paper includes reference to Scott Nadal but I don’t see any of their in depth involvement (I might be wrong here). It is obvious that “Sunny King” is a nickname (ppcoin.org website registered in China) and if he steps aside like Satoshi did who will carry this multi-million dollar project over the next few years?
  2. PoS is at the moment questionable. Some programmers pointed out that at the current stage it is a “concept” not a working solution. Even Sunny agreed partially with it by posting his new proposal on bitcointalk for solving this.
  3. There were 1,8 mln PPCs mined on 29 Aug 2012 (I think the date is right) are those initial adopters able to do 51% PoS attack now?
  4. There are more than 33,000 McDonalds in the world if they start accepting PPC and do on an average 1 PPC transaction per minute that’s 10 x 33,000 = 330,000 transactions per block, can PPC handle that? (Bitcoin can only do about 2,500 transactions per block – based on the transaction size)
    What I like about PPC:
  5. 1% inflation with PoS. It does not have to rely on the miners forever.
  6. Unlimited supply. I believe this concept is widely misunderstood, very few people took a look at inner workings of the currency to understand block creation awards vs time.
  7. We are here to make money, PPC has a very strong case for it.
    General Comments:
    On the logo: The simpler the better, they might offer keyboards with the “PP” sign in few years.
    On the Name: While “Pee Pee” sounds a bit funny in English, it is perfectly innocent in other languages. I would suggest to steer the acceptance signs to something like this: “PPC accepted here, Peer to Peer Coin” thus marketing “PPC” vs “Pee Pee Coin”.
    Sunny markets PPC on bitcointalk heavily, nothing wrong with that, but I think Satoshi was right when he urged early adopters to have the bitcoin gain ground slowly and work on the strengthening the security and improving the inner working of the coin. If it fails hard once, it will be very difficult to regain people’s faith in it.
    The forum is missing a Developer discussion: Is there an E-Commerce solution for PPC? Any open source software that allows easy website integration?
    Final thoughts:
    PPC is a very good concept but in the current state in cannot be a major player on the crypto-currency market; however it has a GREAT potential. Kudos to Sunny and all that helped out.

Disclaimer:
I do not own very many PPCs (unfortunately).

Thanks sahkan. I will try to address a few points here.

Scott has been busy recently but I think he would return to the project at some point. Yes without me the project could lose focus but I am here with quite a bit dedication. Unlike most other altcoin developers, I took my work very seriously and spent way more time and effort than the others.

The first day mintage is well shared among participants as we pre-announced the release 9-day in advance. I think there is only very few people that is capable of attacking PoS right now, if any at all. But in any case, that’s why the broadcast checkpoint is added, to ensure that a bug or an attack would not cause extreme damage to the network.

The type of transaction rate your refer to is not practical on any of the bitcoin forks at the moment, there are multiple scalability bottlenecks that need to be addresses before it becomes realistic. This is currently not our focus, we shall see what happens on the bitcoin side first.

As to confirmation speed, this is something touted by litecoin fans a lot. In my opinion litecoin is still too slow for that if the argument holds water. Retailer does not need to wait for confirmations, they only need to see the unconfirmed transaction. Only when you are dealing with anonymous transactions maybe you want to be safer and wait for confirmations.

From technical point-of-view, it would be nice to focus on technical side completely. But from entrepreneur point-of-view, without any marketing effort the project will be left in dust by it’s competitions. Most altcoin projects have no technical innovations, just a clone job, but a lot of marketing/shouting/spamming, yet we have seen quite a number of them becoming successful. So I do encourage our users to go out and promote ppcoin, to the major players in bitcoin, to retailers. Ask them to help support new innovations, care about environment etc.

I know you are very dedicated, but can you do it all yourself? I would envision something like http://www.bitcoin2013.com/ but for PPC in few months. Altcoins do not matter, people will stop mining them once difficulty goes up and they will all go away.

That’s a premature comparison, you know bitcoin has 1000x community, interest and exposure than ppcoin right now. Give it a few years I think. I will also try to be a good leader in the interim. We have already seen some interest in the participation of development, that’s actually quite some progress from last year.

Can anyone tell me what is the PPC block reward formula for PoW? IE now difficulty is around 360K and block reward is about 400 PPC, what would 500K difficulty give us?

What’s not to like at this point. Low barrier to entry. No real downside.

As lame as it sounds, I think expanding on the official facebook page and drawing support from the forum to there might help boost interest. PPC miners who like the facebook page can tell their friends about it and get them to go there for information. Hopefully a chaine reaction would ensue.

PPC needs to break out of the community of miners and also include people who might be simple users of the currency. Some online stores accepting PPC for electronic goods and clothing would be HUGE.

[quote=“sahkan, post:1, topic:82”]The forum is missing a Developer discussion: Is there an E-Commerce solution for PPC? Any open source software that allows easy website integration?
[/quote]

I have added a Development discussion topic board :slight_smile:

[quote=“FuzzyBear, post:8, topic:82”][quote=“sahkan, post:1, topic:82”]The forum is missing a Developer discussion: Is there an E-Commerce solution for PPC? Any open source software that allows easy website integration?
[/quote]

I have added a Development discussion topic board :)[/quote]
Great!

The problem is that there is almost no reason for a user or a merchant to use ppcoin instead of bitcoin, as of today. I’m not saying we shouldn’t encourage efforts to raise its profile for users, just that we’re fighting an uphill battle to do so.

ppcoin may be more “environmentally friendly”, but this is an externality, does not (currently) affect system economics, and is not nearly as relevant as the issues of ease of exchange, infrastructure, ease of use, track record, relative stability, network effect, etc. all of which make bitcoin the easy decision for a crypto-currency user.

However, ppcoin, or something like it, does need to be waiting in the wings. Proof-of-stake may be an important conceptual advancement for network protection, reduced transaction costs, and lower environmental costs. In the future, one or all of these issues may become important. If ppcoin gets to pure proof-of-stake, and this is determined to be, in fact, more resilient to attacks; or if Bitcoin starts to get bogged down by the requirements of miners to receive larger and larger transaction fees; then the world would benefit from a relatively quick and smooth transition to an already working, mature proof-of-stake system.

So the point is how to have ppcoin stay alive and thrive while it is playing proof-of-stake backup to bitcoin. This may be best done by proving to speculators that ppcoin is an important hedge against possible bitcoin failures down the road. Buy and hold ppcoin. Convince others to buy and hold ppcoin. Focus on the conceptual improvement that is proof-of-stake: (1) network security, (2) far lower transaction costs, (3) small environmental footprint.

I’d like to hear from experts who are convinced of the superiority of proof-of-stake. Is bitcoin susceptible to the issues of attack and/or high transaction costs? Does proof-of-stake offer meaningful and differentiated improvement?

POS is a superior system, at least in theory…I’m not sure that anybody would disagree with this. However, many people have issues with the way it is implemented with PPC and moreover they dislike the checkpoint system (which protects the network until it is mature enough) and would argue that the checkpoint system makes PPC centralized. They aren’t totally wrong in all fairness, however in (if I’m not mistaken) ~4months the checkpoint system is scheduled to be removed.

Is bitcoin susceptible to a 51% attack? Yes, unquestionably, in fact its susceptible to a 30% attack, a user who holds 30% of hashrate on the network (see: ASICminer) could indeed push through a double spend (and I’m not sure about the figures) something like 35% of the time, 51% is a number that says it could be done unquestionably. This is why you see people worry about the hash power certain pools hold over the network. Of course, a person would have to have malicious intent…the reason the attack was discovered was because it happened accidentally, and the network forked.

The concern people have with POS in PPC is that they feel it unfairly rewards early adopters, or just people who hold a very significant amount of coins…its not a flat 1% inflation based upon your coins, as there is some randomness involved and by holding more coins one has a greater proportional chance than a person with less coins to find blocks… also there is the concern that if they keep their coins from minting and then open them up to get POS blocks that their accumulated coin age would be very high and they would get several blocks in a row, this would allow them to push through a double spend. NOTE: this would take ~12% of all coins (as my guess). This would also require totally malicious intent and in fact as opposed to simply destroying a network ‘for fun’ and still having one’s hardware he/she could sell or use otherwise (as one could do with a POW attack) he/she would have completely destroyed all value in his/her treasury of PPC (which as previously noted would have to be very significant).

For example, were a moderate government to decide they didn’t like Bitcoin, they could easily download the blockchain and begin mining with the processing power they already posses, push through a double spend and just go back to what they were doing. The bitcoin network is very large and getting bigger, but don’t misconstrue proportionality, it wouldn’t take the US to destroy it, a medium country like say…South Korea could do it easily.

An additional concern with POW is that as the reward per block drops then miners will have less and less incentive to actually mine, this is why people are concerned about rising transaction fees…unless we are to get free hardware and electricity and ignore depreciation of hardware and mine for free, there has to be some incentive to get people to mine, so transaction fees in time will certainly have to rise (even if Bitcoin takes off in value).

There is also the environmental concern with the electrical usage of the bitcoin network…yes, its less than Visa or Paypal, etc… and its better…but its not ‘good’ and still a waste when a POS system would require MUCH less energy to run.

I do think you have the three main points correct, and I agree that its a marathon we face with PPC as opposed to a sprint…having said that, there is room for more than one crypto, don’t forget that. Its not like the world currently operates on one currency, after all.

The infrastructure of PPC (as you noted) is what needs work, not because its ‘bad’ but because that’s what’s really going to win out in the long run…ultimately it boils down to abstraction and useability. Most of the world is not a computer engineer, hell I was just at a wedding with a few hundred people and 3 of them had heard of bitcoin (plus me), one was a software engineer working with Living Social and Amazon, another a prep school principal who is just interested in things and has two PhD’s and the third an investment broker for a fortune 500 bank.

Don’t underestimate how low adoption still is, because in the scheme of things its utterly insignificant.

I actually would disagree that environmentally friendly is an externality, after all, there are electrical costs and transaction fees (which you again, noted), but it doesn’t take much foresight to see the actual, tangible benefits of that. Not to mention the added benefits and global shift to sustainability in general. I will concede that people won’t ‘change’ or ‘pay more’ for green, however all else being equal they will almost without exception choose that…so it is definitely added value.

I don’t see PPCoin as waiting in the wings, I see it as poising for a jump…I know that me and several other people are actively supporting projects around PPC right now, in many ways its just a superior choice.

I will say that I believe you’re right, as of now, there is little reason for a merchant to accept PPC (beyond perhaps increased sales from a new way of purchasing that is). However, perhaps a first obvious target for PPC would be the ‘green’ industry. Solar Panels, alternative energy, etc… All things must go forward from where they are and if we are to target merchants, well, that’s a huge industry that would see the benefit of PPC.

Having said that, what’s more important is the infrastructure and I think more people need to realize that as opposed to looking for a quick score as an investment…which is fine, but $10,000 today isn’t as cool as $10,000,000 two years from now, and we do have the potential to get there.

Very good post from you, and I agree with your points.

Thanks so much for taking the time to write an informative response.

I have some comments and questions.

I’ve seen some concerns expressed about PoS. Example https://bitcointalk.org/index.php?topic=168924.msg1764680#msg1764680. I am unable to judge whether these concerns have merit. You mentioned some of these elsewhere in your post (re pushing through several PoS blocks in a row). I would love to read a definitive rebuttal of all serious challenges to PoS as a superior system.

I agree that the checkpoint criticisms are irrelevant if it is only a temporary bootstrapping measure.

I think you and I are agreed on the potentially large benefit of reduced transaction fees … although this lies in the future.

I take your point that, all else being equal, “environmentally friendly” could tip merchants and users to ppcoin. The tough part of that is that all else is not equal between bitcoin and ppcoin.

I do not have technical experience or education. My background is in the financial industry. But I would like to get involved in supporting worthy projects. PM me if you think I could get involved in some way, even just with financial backing/bounties, etc.

Thanks again.

Thanks so much for taking the time to write an informative response.

It is my pleasure.

I've seen some concerns expressed about PoS. Example [url=https://bitcointalk.org/index.php?topic=168924.msg1764680#msg1764680]https://bitcointalk.org/index.php?topic=168924.msg1764680#msg1764680[/url]. I am unable to judge whether these concerns have merit. You mentioned some of these elsewhere in your post (re pushing through several PoS blocks in a row). I would love to read a definitive rebuttal of all serious challenges to PoS as a superior system.

The serious challenges leveled here by Tacotime (who is a great developer btw) is that a user can potentially push through a POS double spend and that it may go undetected, well that is one concern. Checkpointing currently helps with this as I understand it.

In other words, as Tacotime mentioned a user may push through a double-spend (using the same coins more than once) and then delete the history of having done so, which results in the ability to simply do the same thing again, as the coin age of your coins would then be fully reinstated.

Its a valid criticism, but again, one that requires a user to directly attack his own coins. The idea that a person would control a large amount of the market share of PPCoins and then spend them and then take it back and nobody would notice is very unlikely, even if he/she had them spread over a large amount of wallets (ie many inputs). It is also an insane risk for a person with a great amount of wealth to take, as if it happened the valuation of coins would plummet. So where people call this POS double spend riskless its better to term it as incredibly risky…Like Beta = 1,000 risky.

Tacotime also makes it sound simple to ‘roll back the POW chain’ to a point previous, well, ok, but the damage has already been done and the valuation would again, plummet. This is why he is advocating with Netcoin a dual system of POS and POW for security. PPcoin relies upon only POS for security with POW only being used to actually mine coins. In the white paper Sunny actually addresses this and notes it is in fact possible to have a sort of IPO for coins and never actually have to mine them, its simply not the approach he has taken.

To further extrapolate upon the problem of a POS double-spend you should know that it doesn’t require 51% of coins to do so, merely 51% of coins that are not currently in circulation, IE that have been held for a period of time and are currently developing stake. In other words if I am never holding my coins but constantly spending them then I would not accumulate any coin age, so say 50% of coins are in near constant circulation, then realistically 26% of all total PPcoins becomes 51% of POS. There are maybe three people now (I recall Sunny saying) who could conceivably push through a double spend (he likely being one of them). The idea that a person could/would ‘get away’ with it is really a longshot, so its not a stretch to assume that it would require a person who was deliberately attacking the network with no care at all about his coins and wanted to destroy his wealth along with that of the rest of PPcoin holders. As the network matures and the user base becomes more diversified this becomes exponentially more difficult to do, even if a person is some evil genius with plans to destroy the network…which is precisely what he would have to be.

Its literally like saying that a person who somehow controlled 51% of all U.S. dollars in savings accounts could theoretically buy a powerball ticket, which if it hit would make him very wealthy and nobody would notice, however if he misses then he sets aflame all of his dollar bills and every other dollar bill in the world. Its just inconceivable. Possible, yes, but very unlikely. By way of rough estimation as of right now a person would have to hold the equivalent of $250,000 USD in PPcoin that was totally offline and generating stake, then unleash it all at once and deliberately fork the network and then deliberately erase all record of that without anyone noticing. The risk to that person quarter million is very significant. As the network grows, that dollar figure equivalent will shoot up exponentially, $250K could be chump change to a lot of people, but $250,000,000 isn’t to very many.

That is the extent of my understanding on the matter, I fear. Perhaps Sunny could elaborate or correct any mistakes in my reasoning.

I’m not sure of a simple fix for this problem that doesn’t involve checkpointing, which again people are viewing not incorrectly as centralization, but that would be an outstanding bounty to post. My first thought was that all wallets be forced open for minting, but there are paper wallets. Another would be that only a set amount of coins can be reintroduced to the network at a time…maybe forcing coins that are held off of the network to be spent in exchange for an equal amount of coins after a set coin age…not sure. Its far beyond my scope if I’m being honest.

I take your point that, all else being equal, "environmentally friendly" could tip merchants and users to ppcoin. The tough part of that is that all else is not equal between bitcoin and ppcoin.

Absolutely correct, but keep in mind that PPC is considerably younger than BTC and has yet to realize itself in any solid direction.

I do not have technical experience or education. My background is in the financial industry. But I would like to get involved in supporting worthy projects. PM me if you think I could get involved in some way, even just with financial backing/bounties, etc.

Expect to hear from me :slight_smile: We soon expect to roll out in exactly this direction, I think bounties are exactly what we need right now. I will say that I feel PPC is a very worthy project to support.

Ha - I’m finally out of the newbie forums! :slight_smile:

I’ve invested a bit (NOTE, not “speculated”) in PPCoin, because I truly believe it has the potential to excel in a parallel fashion like BTC, and it improves on BTC in a couple key aspects. In other words, its not just a get-rich-quick scheme.

I think when there is a an automated, but decentralized way for peers to agree on exchange rates for fiat - to - alt, alt - to - alt, and alt - to - fiat, that there will be no limit to “how many” alt coins could potentially be used.

In fact, if done scalably and responsibly, most vendors might be able to implement an API that allows for this.

For now…I think to gain prominence in the short term, this forum membership should question if we need to add purely PPCoin services and products. It would provide a legitimacy that other “dime a dozen” alt coins lack, except for, of course, BTC.

A short comment on percepted “superiority” of PPC.
On a technical basis - yes, sustainability is always the key.

But that did not stop the mankind from developing rapidly by unsustainable consumption of fossil fuels, did it? This is exact analogy of Bitcoin. Exponentially growing in value, because of “over-exploitation” – that is, it is an will be always more and more costly to mine. And markets NEED expensive items! The whole BTC theory is based on scarce availability of 22 million coins only. And markets LOVE that! Thus, real dollars flow into it.

PPC is much more sustainable, but slowly growing and low returns. Much like wind power. Seriously, wind power is a good analogy to PPC. It may be unlimited in the long term, but if you try much more intensively, the returns don’t come back linearily with the investments. It is a safe bet, but a rather dull choice. Markets definitely don’t dig that. Safe bets are for losers (who should not do stock market business anyway), and for old people… who… don’t have that much time left anyway.

My advice is: build resilient, superior network architecture first, not an experiment. Scale it up, no toying around. Prove the reliability. The markets with real dollars will come then. But first, we need to survive the Bitcoin network difficulty mayhem that is in front of us in a few weeks, months.

[quote=“WEi Bammka 9, post:15, topic:82”]A short comment on percepted “superiority” of PPC.
On a technical basis - yes, sustainability is always the key.

But that did not stop the mankind from developing rapidly by unsustainable consumption of fossil fuels, did it? This is exact analogy of Bitcoin. Exponentially growing in value, because of “over-exploitation” – that is, it is an will be always more and more costly to mine. And markets NEED expensive items! The whole BTC theory is based on scarce availability of 22 million coins only. And markets LOVE that! Thus, real dollars flow into it.

PPC is much more sustainable, but slowly growing and low returns. Much like wind power. Seriously, wind power is a good analogy to PPC. It may be unlimited in the long term, but if you try much more intensively, the returns don’t come back linearily with the investments. It is a safe bet, but a rather dull choice. Markets definitely don’t dig that. Safe bets are for losers (who should not do stock market business anyway), and for old people… who… don’t have that much time left anyway.

My advice is: build resilient, superior network architecture first, not an experiment. Scale it up, no toying around. Prove the reliability. The markets with real dollars will come then. But first, we need to survive the Bitcoin network difficulty mayhem that is in front of us in a few weeks, months.[/quote]

I really like the analogies and the advice…

[quote=“WEi Bammka 9, post:15, topic:82”]The whole BTC theory is based on scarce availability of 22 million coins only. And markets LOVE that! Thus, real dollars flow into it.
…It is a safe bet, but a rather dull choice. Markets definitely don’t dig that. Safe bets are for losers (who should not do stock market business anyway), and for old people… who… don’t have that much time left anyway…

My advice is: build resilient, superior network architecture first, not an experiment. Scale it up, no toying around. Prove the reliability. The markets with real dollars will come then. But first, we need to survive the Bitcoin network difficulty mayhem that is in front of us in a few weeks, months.[/quote]

There are a lot of assumptions here.

One: PPCoin has no upper limit due to the fact that a hard stop at 21 million is not programmed in. You are definitely mistaken about your understanding of what “no upper limit” means for mining. The limits are not set by the hard stop, as most would have you believe, but by economics. As the difficulty algorithm scales, the market will decide if it makes sense to keep mining. Just look at Bitcoin - it is no where near the ultimate hard stop (currently at 11 million coins mined), even though the price keeps going up. Eventually the price inflation will prompt more mining, and yes, it might hit that limit, but with PPCoin, the market can keep going past this low artificial stop, up to 2 billion. Now that’s a potentially stable monetary unit.

Two: we’re all in this for a quick route to riches. Yes, a lot of us look at PPCoin and think, “hey, maybe the market will realize the value here someday…”, but ultimately, the concepts and the whitepaper underpinning the PPCoin concept is what gives it value, not speculation. Miners are obviously supporting both coins from a profitability perspective, which is critical.

The rest of your quote analyzes PPCoin from a standpoint of short-term profitable trading in the exchanges. I wouldn’t know about that - I’m trying to support development of a coin long-term that seems viable. If the investment pays off, great; if not, I at least tried my best to improve on a way to move currency peer-to-peer, where it should be. No, I’m not old or dull, but I’m also not looking at PPCoin with a narrow view of short term profitability

Three: There are insurmountable problems with the “network” that will present unforeseen and untenable problems with continued use of Bitcoins (and might happen as well for PPcoin). This is a legitimate statement. However, as we’ve seen, this ecosystem doesn’t just throw its hands up and walk away. As problems are encountered, the market will adjust, but not abandon, these currencies. That will happen first, unfortunately. Then, there will be created some novel technical solution to whatever issues are encountered. Those looking for short term profits will be scared away temporarily during these periods, but the community, as has been shown, will hang onto its investment, and take their money when they arrive, and then buy back at bargain prices when they leave. :wink:

I’m not opposing you… I agree.

I’m not entirely comfortable with this free market thinking and the idea that the economy is some form of God. It is exactly that mindset that is destroying the environment. We live on a finite world and the idea of absolute decoupling is nonsense, despite what neo-liberal economists would have us believe. The relationship is not economy->markets->world. But world->economy->markets.

Though the irony is that I find PPC interesting exactly because I think it has the potential to become way more decoupled than any other currency…

Not necessarily. Sure, my kids need to eat, but I like the idea of a peer-to-peer low energy currency from both an environmental and libertarian standpoint. My geekiness loves it too…

+1

What are these insurmountable problems? And if that’s so, how can the market adjust and overcome something that is insurmountable?

If you mean that at some point, governments might decide to pull the plug (after all, they own the backbone on which it all depends), then I might agree with you…

“insurmountable problems” defined; some maximum number of transactions that can be supported by updates to the chain every ten minutes. At least, that’s my flawed understanding.

I’ve read in some posts on the Bitcoin forum that there will be a maximum “number of transactions per time unit” encountered in the next few months if the Bitcoin transaction numbers really take off??? Again, somebody correct me here - I hope I’m wrong on that point. :-\