Great explanation, thanks for that!
I am not pillow, but here is run down what might happen:
- In the weeks prior the halvening btc price will go up by buyers expecting a upswing due to less inflation. As a result ppcbtc drops.
- Hours? after the halvening btc drops again due to massive speculation/pumpanddump. As a result ppcbtc returns back to its mean, but due to btc’s lower inflation it stays at a lower rate.
- weeks? after the halvening, less and less miners will be profitable in btc and switch to altcoins. As a result btc will drop due to centralization concerns. In addition, ppc hash rate might rise, lowering ppc’s inflation rate.
In short: expect volatility. Ride the tides.
I thought the Peercoin inflation rate was determined by the ratio degree of minting vs mining. If more people are mining PPC than minting PPC, wouldn’t the inflation rate rise?
The ratio refers to the pos/pow blocks which is about ~5.2 : 1.
The inflation rate refers to the change of Peercoin money supply.
The change of Peercoin money supply is determined by:
Proof-of-work blocks (increases supply depending on pow difficulty (higher difficulty decreases reward per block)
Number of transactions (more transactions decrease supply because of the current 0.01 PPC transaction fee)
Proof-of-stake blocks (increases supply at a rate 1% per year of staked coins)
so more miners results to higher pow difficulty results to less pow rewards results to lower inflation rate
Ah I see. I had thought only PoS difficulty changed mining rewards.