[quote=“Cybnate, post:18, topic:1941”][quote=“Sentinelrv, post:16, topic:1941”]And if what I wrote above is true, (Without reading the other responses yet) then the rich get richer argument should also be false. Let’s say 99% of people own a small to average amount of Peercoins while the remaining 1% are super rich. The rich would only get richer if the newly minted coins were unequally distributed, for example some or all of the coins that should have gone to the 99% go to the 1% instead.
What should be happening is that someone who owns a small to average amount of PPC is getting a small fraction of their value wiped out through inflation, but then to make up for that they get some newly minted coins. On the other side, the few people who hold massive amounts of PPC should have a much larger portion (Compared to the 99%) of their coin value get wiped out through inflation, but then they get a much larger portion of the newly minted coins to make up for that. In the end, whatever portion of their wealth gets wiped out through inflation, the same portion of value should be given back in the form of new coins. Nobody should be getting more or less value than they originally had. Correct or no?[/quote]
Sounds correct to me. The issue some might have is that some people might not have the ability to obtain their 1% as they need to make transactions for a living, where the rich not necessarily need to do that or to a lesser extent.[/quote]
The 99% are living on a cheque-to-checque basis. They have to spend their earned coins to pay bills. The 1% put most of their coins in POS mode. That is where the “rich gets richer” is from.
This problem might be circumvented if Peercoin becomes a “pure” backbone currency, which every owner buys and holds as a store of value only, almost nobody spending or trading it. Then there must be another problem, i.e. where is PPC’s value (exchange rate) determined? It must come from very thin trading on some exchanges. Thin trading means huge fluctuation in prices. Someone’s cashing out their PPCs to pay surgery could trigger a slump in price. Huge fluctuation in prices means huge risk and high instability of the value of your stash of PPCs. Risk and instability reduce confidence.
A “backbone currency” has to be highly liquid to be stable. Those “highly liquid” coins earn no POS and don’t contribute to securing the network. There appears to be a contradiction.