How PPC can be a dominant cryptocurrency

Protocol
1

In my view, there is a very obvious reason why Peercoin in its current form is not positioned for mainstream adoption. The first thing anyone with the slightest technical understanding talks about when discussing PPC is centralized checkpointing. And it is not the checkpointing that is the problem, that is just the symptom. The real problem is as follows:

  1. the “double minting” or “nothing at stake” problem (which is being brought up very regularly now, by myself included)
  2. low mint participation rate, ie, people minting only periodically such that the aggregate mint rate is, on average, too low

In fact, I think removing checkpointing without addressing these issues would be disastrous. The more I think about the problem, the clearer it becomes that there has to be a punitive aspect to the PoS algorithm. The Slasher algorithm which I recently learned about is an example of a punitive PoS algorithm (http://blog.ethereum.org/?p=39/slasher-a-punitive-proof-of-stake-algorithm). The thing I don’t understand is, why work on literally ANYTHING else while such fundamental issues remain unsolved. Furthermore, if the proposed solutions are available, though admittedly they would require a hard fork and a huge amount of development, why not mobilize the community to address the issue head-on? All this feature development and incremental usability improvement will mean nothing when somebody implements a robust PoS solution such as Slasher into an altcoin. Even the discussions about anonymity (zerocoin, stealth addresses, coinjoin) should be shelved until we have a stable, reliable infrastructure to build upon. I believe proof of stake is the future of cryptocurrency. Still not sure if it will be Peercoin…

2

Let me add that I am invested in Peercoin and I want to be part of the solution. I’m a weak developer, but if I knew there was a real effort to address these issues I would be willing to donate my time and resources to make it happen.

3

Very good questions! I hope Sunny can comment on this. As far as I know, Vitalik (the inventor of Slasher) has contacted Sunny about this a few weeks ago.

4

To put it bluntly, the Slasher algorithm was posted on that blog post on January 15, 2014. (Only 13 days ago) It has yet to be properly peer reviewed and tested. It’s a new idea, and possible exploits are not known yet.

Also consider the fact, that there may be goals, development points already planned for Peercoin, and not all of them are listed by Sunny King until it is time, the network matures, etc, etc, etc.

When Sunny put out 0.3 he had already made comments about 0.4 and 0.5. Who knows what lies ahead in 0.6. Perhaps Sunny already has a scalable development plan laid out to 1.0-Release and simply hasn’t told anyone until a larger development team has been assembled.

When I first read Slasher in length, I read it twice, and saw some merit in exploring it further. But at no time did I think we should put the brakes on all current development in Peercoin.

The first thing anyone with the slightest technical understanding talks about when discussing PPC is centralized checkpointing. And it is not the checkpointing that is the problem, that is just the symptom.

I disagree. Checkpointing is not a symptom. It’s an smart design for a new, young coin to incorporate. Checkpointing was purposely set up in the beginning so PoS in its current form could be tested, which inadvertently caused invention of the Slasher concept by using Peercoin’s current model as an base example.

I don’t think there is any emergency here. I think checkpointing to date has maintained the integrity of Peercoin. I think Slasher in the 13 days since it has been discussed has some possible merits, but we don’t know if there are any repercussions yet. It is simply to early.

I think that if Slasher really is a good idea, then it can be incorporated into Peercoin, let’s start a dev topic on just slasher and its merits and possible downfalls and see what we come up with.

5

I do not mean to detract from the current conversation but do you know where I can find the comments that Sunny King has made over newer versions. I have searched but have yet find anything.

Thanks,

Hibero

6

Start here, from Dec 2012 chat with Sunny King (He talkes about decentralizing checkpoints in 0.5 as part of his initial plan)

www.peercointalk.org/index.php?topic=1598.0

7

Thanks, but the initial question was referring to this two issues:

1) the “double minting” or “nothing at stake” problem (which is being brought up very regularly now, by myself included)
2) low mint participation rate, ie, people minting only periodically such that the aggregate mint rate is, on average, too low

I wasn’t aware of them before, would be interesting to hear a comment on this.

8

Agreed that there are other reasons for checkpointing when the currency is young and vulnerable.

[quote=“Sebsebzen, post:7, topic:1998”]Thanks, but the initial question was referring to this two issues:

1) the “double minting” or “nothing at stake” problem (which is being brought up very regularly now, by myself included)
2) low mint participation rate, ie, people minting only periodically such that the aggregate mint rate is, on average, too low

I wasn’t aware of them before, would be interesting to hear a comment on this.[/quote]

Here are a couple of old threads from 2012 discussing these issues:

Proof of work is fundamentally flawed because it incentivizes centralization. I am starting to believe that Bitcoin can never transition to PoS due to its stakeholders being heavily invested in mining. In the next 10 years, 93.75% of the 21 million coins will be mined and there will be a massive shift in incentivization for the miners which could prove to be disastrous. The first coin to implement a sound punitive PoS algorithm will be in the best position to overtake Bitcoin if/when this happens.

9

This is the second time this has happened to me in 24 hours. I am in the middle of writing a reply to a topic, and by the time I’m ready to push POST, some one else has written something completely similar.

It seems there is a consensus in the community and it’s not just ppcman’s sole opinions on any of this…

I’m going to post what I’ve written so you can see the similarity to the previous post.

I have a red box warning which says “Warning - while you were typing a new reply has been posted. You may wish to review your post.”

I reviewed what had been posted and wow, is it strikingly similar to AlphaBar’s reply! :slight_smile: Good stuff!

---- my original reply follows below ----

[quote=“Sebsebzen, post:7, topic:1998”]Thanks, but the initial question was referring to this two issues:

1) the “double minting” or “nothing at stake” problem (which is being brought up very regularly now, by myself included)
2) low mint participation rate, ie, people minting only periodically such that the aggregate mint rate is, on average, too low

I wasn’t aware of them before, would be interesting to hear a comment on this.[/quote]

#1 The “Double minting” or “nothing at stake” problem as mentioned by the Slasher blog post 2 weeks ago, is already being reviewed by Sunny King, the developer of Peercoin. At this time, Peercoin remains safe because of checkpointing (way to go Sunny!).

If it is deemed to be a real problem, you can expect a fix in upcoming releases of Peercoin.

#2 is best answered (in my own opinion) by what Sunny King previously wrote about this topic before:

Sunny King quoted from bitcointalk.org/index.php?topic=101820.msg2013892#msg2013892

Some of you have noticed that stake participation rate is low currently on the network, thus falsely concluding that proof-of-stake doesn't work. However to put things in perspective, in the future of bitcoin, let's say bitcoin reached 20M money supply in some future date, and average block pay to miner is now 10BTC per block (subsidy+fees). That would be an annual income of ~500K BTC, a paultry 2.5% of money supply, for the entire mining business to protect the network for a year. However, mining is weaker in the sense, you don't need the 2.5% of bitcoin money supply to launch 51% attack on bitcoin, you just need to rent hashing power for a few days to destroy the credibility of the network, which could potentially cost only 1% of that 2.5%. While if you want to 51% attack on proof-of-stake, at any time you probably need say 5% of money supply to do it, even just for a very short period. When the stake participation rate becomes higher, the cost would become more and more prohibitive
10

For those who are interested, it appears that Vitalik has shelved the Dagger PoW algorithm and is pursuing a PoS/PoW hybrid for Ethereum:

It appears that Ethereum will end up using Slasher or some variation of Slasher. On the flipside, Ethereum has unrelated issues that will hurt them in the long run:

  1. 50% premine and questionable terms of their IPO
  2. Very real security vulnerabilities related to Turing-completeness

I will never understand such a complete lack of common sense and foresight from people who are leaders in this space (and much smarter than myself). Why in the hell are so many people wasting their time with memory-hardness and ASIC-resistance??? It is a simple exercise to prove, beyond any doubt, that there can NEVER be a proof of work algorithm that does not incentivize specialization and, as a result, centralization. Simple. You can delay, postpone, and reduce the benefits of specialization but it is an unquestionable inevitability that is baked into the very core of the concept.

As for Ethereum, why even talk about an extremely risky proposition such as Turing-completeness before the core infrastructure issues are resolved? It’s like spending time arguing over the color of the walls before the foundation of the building is laid. Even worse, the foundation has known issues… /rant

11

When I first learned about Etherum, I thought it was quite the novel concept. But it is plagued with disasters throughout, too numerous to mention in one post. (needs its own topic post). Ethereum smells like the same stink as Quarkcoin but of a different technology, build, and purpose. It rewards the founders and early investors, and then dumps on every one else including the miners.

Ethereum is going to fall flat on its face within its first 1-2 years (if it even makes it that far).

With that being said, for those of you who watch Dragon’s Den or Shark Tank, Kevin O’Leary once said something like this:

“This is a prime example of why a lot of “A” grade students end up working for a lot of “C” grade students later in life.”

end of my rant too. :slight_smile:

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1) 50% premine and questionable terms of their IPO 2) Very real security vulnerabilities related to Turing-completeness
  1. IPO has been postponed and they will re-consider the terms (update 29.1.2014)
  2. At least they are pushing the envelope on cryptocurrencies. Also, still better solution than Mastercoin, NXT