I feel a 1% reward is to small and might not be enough of a incentive to get people to mint, this could become a problem when POW is completely turned off in the future. What do you think?
An increase of this reward is equivalent to a relative difficulty decrease. The consequences are also a PPC price drop, not sure it’s a good idea now :).
- PoW doesn’t contribute to block chain security.
- The main economical incentive for minting shouldn’t be the 1% penalty for not minting, but maintaining the security of the network and hence the value of the Peercoins.
- With PoW decommissioned you need a way to generate Peercoins to compensate the destroyed Peercoins by transactions; at least this is how I interpret the 1% annual creation of Peercoins (it’s not really a “reward”, because you increase your share as well as the total number of PPC by 1%). Without that (and without PoW) you’d end up with a deflationary asset what would likely lead to very low tx rates…
NuShares has an inflation rate of 8%, which basically tells you to participate and mint/vote or else…
For those for want to opt out for various reasons wont even think of buying one.
To put this in extreme perspective , MINT has a 20% inflation rate, see how that turned out.
[quote=“thehuntergames, post:4, topic:3129”]NuShares has an inflation rate of 8%, which basically tells you to participate and mint/vote or else…
For those for want to opt out for various reasons wont even think of buying one.
To put this in extreme perspective , MINT has a 20% inflation rate, see how that turned out.[/quote]
Where do you get the impression that Nu’s NSR supply inflation is 8%? With the fixed 40 NSR block reward it’s starting at 2.10% per annum and only going down from there.
Where do you get the impression that Nu’s NSR supply inflation is 8%?[/quote]
The opportunity cost of holding NSR and not minting is over 8%, because most shares are not minting, so blocks are easy to find. At the current difficulty, I think it’s actually near 10% annually.
yes, excuse my poorly phrased statement.
But still, although 1000M initially were created, only about 25% are actively minting, hence 4 times 2%=8%.
dont remember where this stat was reported but here s cybnate mentioning it: http://discuss.nubits.com/t/percentage-of-nsr-actively-minting/639/2
That’s right but depending on perspective.
You might expand the amount of your owned NSR by 8% annually (if the current minting rate stays the same).
But the total annual increase of NSR volume is at approx. 2% (like Ben stated) and decreasing. So you can view that as a loss of 2% (assuming that the total value of all NSR is not affected by the rising NSR volume and hence each NSR loses a little bit of its value).
If you sum up the 8% gain and the 2% loss you end up with 10% difference annually between minting and not minting so that would be the opportunity cost of not minting 
I know that this is mathematically not correct as you need to divide and not summate; but 1.08/0.98 is close to 10% (1.102)
An increase of this reward is equivalent to a relative difficulty decrease. The consequences are also a PPC price drop, not sure it’s a good idea now :).[/quote]
Surely a small increase to maybe 1.5% or 2% wouldn’t hurt, i mean there are altcoins out there with 5%+ mint reward and there stable.
I would guess that Sunny King selected 1% to minimize the motivation for attacks that increase the likelihood of minting (the infamous “nothing at stake” attack, for example). 1% compounds so slowly that the benefits of such an attack are minimal. I would be interested in hearing his thoughts on an increased reward. I agree that moving to 2% doesn’t seem to be detrimental to security, but I am not an expert.
[quote=“masterOfDisaster, post:3, topic:3129”][…]
2. The main economical incentive for minting shouldn’t be the 1% penalty for not minting, but maintaining the security of the network and hence the value of the Peercoins.
[…][/quote]
I wonder why this is not really taken into regard when talking about the annual 1%…
…if you consider Peercoin rather something to store value than to transfer value frequently, you have a strong incentive to make sure that the Peercoins are secure.
Luckily this can be achieved for an investment of less than USD 50 for buying a RaspberryPi (including SD card, etc.) and for only a few bucks of power costs per year; that way you get a minting device that can run continuously without even making noise!
1%, 2%, 3% gain (which in fact is no real gain, but you get your share of an overall increased number of coins) - who cares? It’s about 100% loss if Peercoin fails!
Yes but your failing to realise that if peercoin ever goes mainstream the average user will not care about minting nor network security, they will only care if the system works or not. Theres even a good chance that the average user wont even know what proof of stake or proof of work is. The point i am trying to make is that in the future non-technical people will probably form the majority of the peercoin community, there will have to be a non-technical reason for them to mint such as a higher mint reward.
@K500
I’m not sure if average Joe will use will use/posses PPCs directly, he’ll hold some PPC IOUs, e.g. over Ripple network.
The average user would be well advised to put the money only into products he/she understands!
And the average user doesn’t even need to know nor understand what PoS is.
Thanks to projects like Peerbox it’s possible for a layperson to run a PoS minter with little effort.
If Peercoin ever goes that mainstream it might be necessary to adjust point 4 on Peercoin — The Pioneer of Proof-of-Stake which currently reads
“Now that you have coins in your wallet, it’s time to learn how to grow your investment with Peercoin Minting.” to something like
“Now that you have coins in your wallet, it’s time to learn how to protect your investment with Peercoin Minting.”