I think, that I have slowly progressed in this topic from switch to pure PoS into merged mining, and continue with other parameters unchanged. Pure PoS is interesting, but merged mining seems to be even better and align with Peercoin ideas (low energy consumption, “clean-green” coin, re-usage of hardware and adding more entropy into system). I know that it was a problem with developers, and significant dev effort, but besides that?
It provides significant advantages:
lower inflation - due to bigger hash power available
lower energy usage - practically 0 energy footprint, being really “clean and green” coin
more stable hashpower from bitcoin-like networks
more entropy
giving more miners possibility to mine it - distributing into more hands = more fair distribution
Disadvantages:
giving PoW blocks to miners mining Bitcoin, not being “single” mined chain - not really important for Peercoin, as miners aren’t really important for it
I dont see other disadvantages - there is no “pegging” to other chain - because it’s not solo PoW chain - it is hybrid PoW and PoS chain with emphasize on PoS.
If I’m missing something please tell me. But please dont tell that being sha-256 alone mined chain is being independent - Peercoin is independent nonetheless - it’s just using miners to our advantage, not the other way around, miners dont hold hostage Peercoin network. I just think we could use them (Bitcoin miners) to our advantage, and provide more fair and better distributed coin. It could be a really good way to engage BTC miners into some activity for PPC. It could be one of the things, why Namecoin has diverged and decouple from Peercoin in the price terms.
But those pools are used by thousands of miners, bigger or smaller. I think that there are more much more entities mining currently BTC then PPC. Pools are always going to be a centralizing factor, but a good thing is that everybody can connect to them - being small miner with 1-10 asics, or big miner with 10K-100K asics.
As I say - an idea invalidated in the past doesn’t have to be invalidated in the future. Best example is implementation of segwit into Peercoin.
Yes, we know this opinion, it’s from 2016, as we know situation has changed with a few things in Peercoin, also development-wise and organization-wise, but that’s not the case.
I’ll try to explain it more clearly, why I think it could be beneficial. First of all I’ll start with a few advantages:
no more power consumption that is required for the network to work - being really green coin, not only from the name, but also in practice/in real life - here could be only 0’s displayed, apart from hashrate https://www.peercoin.site/#energytable
fair distribution is still intact and in fact more distributed among bigger group of Bitcoin-like miners (pools can be centralized - yes that’s true, but number of entities and ventures mining BTC is much bigger than PPC)
inflation would be tampered to natural levels, that were always wanted and perceived as natural 1%+, offsetting lost private keys, and securing purchasing power of PPC
In my opinion apart from tampering inflation (which isn’t synonymous with deflation), and providing more stable inflation within targetted 1%, it also provides more stable hashrate from bigger network, not being depended on price of peercoin - without incentive for PoW miners to try reorg, when slapping a lot of hash power on it’s network (I know it’s rather not possible now, but it wouldn’t be possible at all). Inflation is offsetting lost of keys, but also is providing stable enviroment, with stable monetary policy, where Peercoin can be spending currency and Store-of-Value, in the same time. Peercoin chain isn’t ‘pegged’ to other chains, because Peercoin security don’t depend on PoW miners.
Of course that’s my opinion, and I could be all wrong with this hypothesis, although I think it provides enough advantages to at least consider it in the long-term plan for Peercoin.
I have some issues with this line of thought. If this were true, then any merge-mined coin is perfectly green. This of course isn’t the case, but rather the added value of the Peercoin mined contributes to a higher overall hash rate (i.e. for Bitcoin) and thus some energy burnt. ‘How much’ becomes a very difficult question to answer at that point, but it is certainly not literal zero.
There is certainly an argument to be made here, but it is at odds with the following statement about decreased inflation, as the amount of coin distributed is significantly less.
Ultimately, I worry that merged mining would destroy Peercoin’s ability to recover from a black swan, as the mining difficulty would indeed decouple from the price. I believe the biggest benefit of the variable block reward is that it increases distribution when the price tanks and conversely shrinks when the price goes up. The social implications of distributing new coin when the network fails socially and removing distribution as it becomes adopted is very powerful. Merged mining would decouple that feedback loop unless the entire crypto world tanked as one.
I’m not sure about this, as there may be some interesting attack vectors here, but at its face it seems correct.
Not completely 0, but close to 0. Indeed merged mined coins, are much more “greener” - energy effective. Nothing can be 100% power efficient, if we are talking about transactional systems, which require energy to work. I mean re-usage of hardware, which would be much more green solution that what we have today (and pretty much, what we can get with fair distribution intact).
For now, cryptocurrencies tanked as one, and were pumped as one, so I don’t see much difference here. Ability to recover from a black swan event? What do you really mean? If price would tank to eg. 0.0000001 BTC? In this case, it would mean that a lot of miners would go away, which would in fact disturb the hashrate and difficulty (massively go down), and probably mean that block times could be variable at least until difficulty is adjusted (probably quite fast) - and increase inflation. I know that this is great incentive at first, when bootstraping the network, but I think that for a 7 year old network, having more inflation isn’t really encouring. I think that we should steer to stable monetary policy, this mechanism is great as I said, but for new, fragile networks, which need a help of PoW miners to survive. I don’t know, if difficulty can be modified too, but if it would be possible, we can somehow offset the effect of the merged miners, modifying difficulty to be easier (and reward them more). It would still work - variable rewards, would be still in place.
If you mean network failure, I can’t really think of how merged mining could actually disturb. It should rather stabilize network, so if anything happen, PoW merged miners, should absorb it much better than current miners, at least that’s what I thought.
As I said - if it’s possible, we could modify difficulty adjustment, to offset this effect, and provide more monetary inflation for them.
I would more emphasis the effect of re-using hardware, and not being a black-burner network - truly closer to the idea of being “green” than ever.
I disagree with this entirely, actually. I am of the opinion that there is no fundamental difference in ‘greeness’ between merge mined coins and non-merge mined coins. This is because the addition of the merged coin to the reward of finding a bitcoin block increases incentive, and thereby hash power, and thereby energy usage, for miners to find that block. You are assuming it is negligible because the Peecoin reward is not as valuable as the Bitcoin reward, but indeed their hash powers are several orders of magnitude different already, so assuming negligibility is not appropriate. Reusing hardware is not the same as reusing energy (and please note that peercoin already reuses bitcoin hardware, merge mining would not change that paradigm so much), and in fact I am of the opinion that the concept of reusing energy cannot be possible in the way you imply.
The idea here is that if the market tanks, new coin lineages will be introduced. The implication that I am operating on here is that in this event minters will value their coins less, and eventually start losing them or turning off their minting software due to lack of care. In this case, the network will truly be in dire straights without the potential for fresh blood to enter the scene. If the hash rate (and inflation rate) are inflexible in this situation, then the mint difficulty will suffer greatly and (especially assuming rfc0011) the network will consolidate into the hands of the few, never to be distributed again. This is the precise time when increased provably-fair PoW distribution methods are important, and naturally the network as-is will seek out exactly that. By merge mining, we introduce inflexibility into the distribution such that recovery from this potentially sad state is impossible. This possibility does not have to be an over-night occurrence, or as dramatic as a single satoshi price valuation, indeed it is a continuous evolution whereby the network is always seeking a harmony between PoS and PoW inflation rates.
This is not a concern as the difficulty adjusts by-block in the Peercoin network.
I am not a fan of this idea, as it will devolve into a debate of how much we subsidize mining, which in my opinion kind of defeats the purpose (especially as it would need to be some kind of exponential curve, rather than linear, as Bitcoin difficulty increases exponentially).
Anything given for free in an open competition increases the amount of competition. In PoW, increased competition means increased energy consumption. In some ways, merged mining would boil down to subsidizing Bitcoin mining with a Peercoin reward.
One interesting option would be to include merge mining and remove PoS reward. This would drive inflation to almost zero and would truly result in only minters that have non-financial motivation. I could see this as a viable path, but would be a huge modification of the philosophy.
Why re-using hardware and energy isn’t possible with merged mining? It’s of course possible and it’s currently done with coins merged mined. I know that re-using old bitcoin hardware, is probably true for Peercoin - but not energy. The incentive for adding additional hardware just for PPC reward isn’t even a concern - Bitcoin miners are calculating their USD/EUR/CNY etc. profit from their Bitcoin operation, and they are almost never including other coins, that they can mine with it - they are too volatile, and not reliable way to provide any estimation on their values. Co-mining miners is just an effect of the software available, and that it is possible - but it’s not something, that is driving their motives to mine or not mine, or to be subsidized by it. I’m operating on current data, and current trends, not speculating without data backing it up - because that’s what we currently have, we can’t operate on something that does not exist.
I don’t see it as a problem. Inflexibilty is only a matter of current difficulty mechanism, which could/should be changed then. Minters are taking the risk on their coins value today also. Rfc0011 is also making minting in reality more compelling and more rewarding (like current PoW situation on Peercoin network), thus more people will likely stake, not less - the participation should be higher to earn higher rewards. As @buckkets said there is always pareto effect with distribution - 20% people owns 80% of the asset supply, and it won’t be fixed even by current mechanism - it always consolidates in the hands of few. And with this adjustification there will be an on-going distribution of coins, just with lower inflation rate (and could actually mean higher miners partcipation - more interest in the coin, not only from the few miners “around”, but from much wider audience, which could also mean more participation in the development or in other areas).
IMO that’s one of the things that is keeping Dogecoin alive, as well as Namecoin - they are merged mined, and imho miners are providing some price support for them, as well.
Providing much more hashrate and entropy to the system - seems fair to me. It’s not like they are giving it for free (mining gear and hashrate), they would participate in the Peercoin network mining also.
This subsidizing would be minimal at best, Bitcoin miners probably wouldn’t even care. I’m basing it on current situation, we can’t speculate what will be the value of Peercoin in the future.
Removing PoS rewards is making the system similar to the economic model of Nano, which doesn’t make a lot of sense to me - people are then required to run their nodes and stake for free… Minters should be rewarded with financial reward, albeit it should be small, to provide small sustainable inflation rate.
Once again, as I said I could be wrong with to many assumptions. I just think that it’s not worth to be a black-burner network, where there is possible solution with higher hashrate, and be provided almost for ‘free’. About inflation - it could be worth a while to maybe figure it out, how to plan the difficulty curve to make it larger than 0.1-0.2% of annual inflation for PoW rewards
I just thought that is a neat solution for proving that we are a sustainable and really green network. But I take your arguments very seriously, and I can be wrong, and in fact Bitcoin-miners, are taking into account all altcoins that they are co-mining as their profit, and add more machine into the system. Even if it’s truth, we would be still participating in the network, that is using the newest and most energy-efficient hardware at all times.
I’m also thinking about it from “investors” perspective, which would not probably like to dilute their share of the network asset to much, as it’s provided utility is also SoV - outlied in the peercoin docs. There are investors in cryptocurrency enviroment - although they are scarce, but if they see sound economic basis that their stake isn’t dilluted too much, and that a coin is on reputable exchange/s - they are going to invest.
I’m thinking that Peercoin is really close to it, with current state. This was my idea, to “improve” it, to make it more unwavering/unshaken and “investable” - not only for speculator gamblers. But maybe it’s not needed at all.
Thus it’s all I can provide, if it’s not convincing and compelling - then I’m not competent enough to defend my stance probably.
Anyway thanks for debate.
