Ben: Today is Saturday, the 24 of May, 2014. Welcome to the third in a series of community interviews with Sunny King, Architect of the Peercoin and Primecoin cryptocurrencies.
Ben: The format of today’s interview will be a moderated chat, and the questions that will be directed to Sunny King are ones that were suggested and selected by the community. A copy of those questions can be found here: http://www.peercointalk.org/index.php?topic=2705.0
Ben: This chat is scheduled for 60 minutes. Any questions that are not addressed during this interview will be tabled for a follow-up interview that will be scheduled for a time in the coming week(s). Details will follow if that is needed.
Ben: We’d like to request that during this interview that any questions for Sunny King or I are asked in the #Peercoin Freenode IRC channel. I’ll do my best to move those questions in to the main interview chat, as possible.
Ben: The link to that chatroom is: https://webchat.freenode.net/?channels=peercoin
Ben: Finally, to introduce myself, I’m Ben Rossi, a member of the cryptocurrency community. For full disclosure, I’m a holder of Peercoin, Bitcoin, Dogecoin, and am an active contributor to the Peershares and Peerunity projects.
Ben: So, without further delay, let’s get started…
Ben: Thanks for joining us today, Sunny
Ben: As you've seen, the community has been very interested in hearing your opinion on all matter of Peercoin and Primecoin related questions
Ben: The original request for questions had over 120 different things that people wanted to know
Ben: Those were narrowed down into a set of about 30 that the community felt were the most important to hear your thoughts on.
Sunny King: Yeah I am happy to see all the interest and work in the community
Ben: I'd like to start with a set of questions related to Peercoin's fundamentals. These tend to come up a lot in different conversations
Ben: First off:
Ben: There has been some confusion over what Peercoin is meant for, which has led to marketing problems. Bitcoin is a transactional currency, so you proceed by getting businesses to accept it as payment for products and services, which generates a network effect and spreads the coins around to more people.
Ben: In your words, how has the idea of Peercoin evolved, and what is the best way, in your opinion to introduce it to the World?
Ben: Is it transactional, a store of value, a "savings account"?
Ben: Or something else entirely?
Sunny King: There is this feeling that in terms of functionality one must differentiate from bitcoin, however this is not what I understand at the moment. In my opinion cryptocurrencies functions very similar with each other, they are all money serving all three money functions. There will be slight different strenth and weaknesses, so that would already warrant healthy competitions
Ben: I know that one of the commonly discussed ideas about Peercoin is that it is intended as a "backbone" currency, which seems to confuse a lot of people.
Ben: For example, you don't need merchants if you are a backbone currency because you aren't supposed to be for daily use, but if you aren't for daily use then how do you generate a network effect and get people to care enough to adopt it?
Ben: For the average person that we'd like to market the idea of Peercoin to, how should we present it?
Sunny King: For example if we compare peercoin and primecoin, you can say peercoin is better at saving, primecoin is better at faster transactions and so on, but this is only slight difference in terms of the overall monetary functions
Ben: While lack of differentiation could be a strength, in some regards, isn't there the danger that the lack may undercut the value proposition of one, or the other?
Sunny King: The term backbone is related to the fact that the blockchain design has limited scalability compared to traditional centralized payment systems
Sunny King: So I did design peercoin and primecoin to function well as backbone, but whether they would kinda specilize into such roles in the future I wouldn't be able to predict
Ben: That's too bad, I was hoping that we could add cryptocurrency soothsayer and future-seer to your title. It would certainly make it straight-forward to sell the Peercoin and Primecoin narrative if you knew what was going to happen
Sunny King: Of course I do not advocate exact duplicate of bitcoin, as many of the altcoins on the market, but there is enough difference offered by peercoin and primecoin I think, addressing some of the issues I see with bitcoins
Ben: Let's talk a little bit more about the differentiation of Peercoin from other cryptos like Bitcoin, specifically regarding their block chains.
Ben: We've already seen the rumblings of what's happening with Bitcoin's block chain size over the past couple of months
Ben: Dogecoin, with it's very quick block spacing, also has started to concern some of it's proponents with the rate of "block chain bloat"
Ben: In the Peercoin white paper, the introduction of the fixed 0.01 PPC fee was included to make sure that the Peercoin block chain was resistant to this concern, at least as much as possible.
Ben: Regarding the fixed 0.01 PPC transaction fee, in the previous interview you said wrote the following
Ben: "In the long term micropayments should be provided by centralized providers, or a less decentralized network optimized for high capacity transaction processing."
Sunny King: There is still this feeling in the bitcoin community that bitcoin alone should be enough, but I thought the market has already spoken for a while, that it wants a lot more than just bitcoin with cryptocurrency
Ben: A lot of people in the community are excited about the Open Transactions project, which they believe is the perfect complement to Peercoin as it would provide a solution for instantaneous micropayments. Do you believe Open Transactions offers this solution and how do you see it affecting Peercoin in the future?
Sunny King: I am not familiar with open transactions, I only know it's an elder project in this regards. Ripple also claims better scalability in transaction processing. I think there would be many such solutions in the future. We could maybe offer our own solutions. Though at the moment there is not pressing need yet
Ben: I presume that you maintain a watch over the network. Is the current block chain size in line with what you thought it would be, at this point in time?
Sunny King: So open transaction probably falls into the category of centralized or loosely federated providers, ripple belongs to a more decentralized solution
Sunny King: my node shows 171MB at the moment
Sunny King: So that's not too bad for peercoin, you probably could download the blockchain fairly quickly
Ben: While it's certainly a benefit, do you believe that transaction volume and distribution is currently where it should be, or, have you considered protocol changes that would increase it?
Sunny King: My guess is that with the direction of sidechain for bitcoin, bitcoin probably would try to address their bloat into a sidechain project, but that's just my speculation
Sunny King: Increasing transaction volume? That's really driven by market, actually peercoin fees are still lower than bitcoin's I believe
Ben: In comparison of their exchange rates, that's true. We're paying approximately $0.02 per kB, today
Sunny King: So the transaction fee aspect does not yet impact much. Currently it's volume is mostly driven by adoption.
Ben: (I had to quickly calculate it, but Bitcoin's min. recommended tx fee is 0.0001 BTC, so ~$0.05 per kB)
Ben: Is the proof-of-stake mechanism the larger deterrent to transaction volume, if you had to speculate?
Ben: People holding their coins to allow them to mature for use in attempting to solve a block?
Sunny King: So my argument with backbone currency is, that there is enough demand for it even if transaction fee stays at the current level of 0.01PPC per KB, as bitcoin gives up some usability by focusing on scalability
Sunny King: I don't think so, just because you can save doesn't mean you don't spend any more, you know
Sunny King: it's two functions of money, you use them at the same time
Ben: That's true, but as one of the commentors in the sidebar channel just added, "since there is a penalty to moving coins (the unfree fee) I think 2 times before I do it."
Ben: They go on to say that they feel that's a good thing
Ben: Is coin control a way to help people make decisions about spending and saving with Peercoin?
Sunny King: There could be some disincentive, but I doubt it plays a big role regarding transaction volumes
Sunny King: It's probably too hard to use for average users. My opinion is that we need to make it easier to use, not more complicated
Ben: Do I understand correctly that you mean that coin control, functionally, is needed, but that the implementation of it needs to be improved?
Sunny King: I even think that the current bitcoin wallet implmentation is overly complicated, that it uses new change address to obfuscate
Ben: We'll come back to the Peercoin wallet, as a topic of conversation, because that's something that people in the community had a lot of questions about.
Ben: Let's return briefly to Peercoin as a backbone
Ben: The term "sidechain," (as far as I know) didn't exist when you introduced Peercoin.
Ben: In the way that the Bitcoin community is using it today
Sunny King: I would actually prefer a simpler approach what I call avatar mode, and you can memorize the keys such that it's compatible with the idea of brain wallet
Sunny King: Right I think sidechain is a relatively new term
Ben: (I think you'll find that most of us feel the same way, and that anything we can do to make the wallet experience better is a good thing)
Ben: I do, however, see similarities between what you describe for Peercoin's "backbone" usage, and what is being promoted for a way to "solve" BTC's block chain issues
Ben: Could Peercoin be marketed as a solution for Bitcoin's woes?
Ben: Not as a replacement, mind you, but as a compatible store of value?
Sunny King: Of course, it's even better if bitcoin wants to specialize into payment processing
Sunny King: But we also must keep in mind, there are a lot of competition these days, so it's not just bitcoin that we are competing with
Ben: In your opinion, which of the block chain technologies (aside from Bitcoin's first-mover advantage, and network effect) poses the greatest concern to Peercoin
Ben: NXT, Vertcoin, and Blackcoin (amongst a host of others) have made waves lately with their implementation of Proof-of-Stake
Sunny King: I am not convinced they have made much progress. Not sure about Vertcoin, but NXT and Blackcoin seems to be derived from peercoin technology.
Ben: Are there any projects in the proof-of-stake that have been announced that you're interested in seeing the outcomes of?
Sunny King: The bitshare team is working on another one, but I also have doubts there. But I am happy that many more projects are happening in the direction of proof of stake now.
Ben: (and just a time check, we're nearing the 60 minute mark. I've still got time, and I'm sure the community would stick around to hear more, but I want to make sure we respect your time. Please let me know when we get close to your cut-off)
Sunny King: I think strategically this year I would really want to take a good look at bitcoin's sidechain implementation
Ben: ...as a potential integration point with Peercoin, or, as a possible extension of the Peercoin protocol?
Sunny King: I have always wanted to expand our currencies to data applications of the future, I thought about what I call 'auxliary block chain' before bitcoin's sidechain proposal
Sunny King: it's okay, I can stay a bit longer no problem it's up to you
Ben: That sounds like it could be very exciting for the crypto. May I ask if you have done more than just research at this point?
Sunny King: Right still at research point. I am also happy that bitcoin is starting in this direction, since I think it's an important shift of the block chain technology toward more utility, you know, after namecoin pioneered the first data application of blockchain
Sunny King: But there could be a whole lot more, it's also in sync with my view that cryptoproperty would rise with cryptocurrency together
Ben: We'll probably discuss this a few times over this series of interviews, but regarding the development of Peercoin's technology, have you considered expanding your development team?
Ben: In the past, you've indicated it was something that you were open to, but so far, it doesn't appear that you've reached a point (publicly) where that's happened
Sunny King: I think Jordan has done a great job in this area. I am quite impressed by the progress made by peershares. So I think we would work closely together from here on
Ben: Personally, I'm happy to hear that.
Ben: I know that the Peerunity project has a lot of enthusiasm behind it, but one of the concerns has been how far the community can push development until it runs into a hard-stop because it would no longer be compatible with the Peercoin reference protocol.
Ben: Coordinating between you and that team would definitely help ensure that Peercoin was stable and secure, while moving forward with lots of the innovative ideas proposed
Ben: Because I know people are eager to hear, can you give us a glimpse of any of the Peercoin protocol-related development that you're currently working on?
Sunny King: Peercoin's protocol is also community maintained, the recent discussions of the protocol has shown that we have many people with good understanding now
Sentinelrv: You mean the cold-locked minting discussion here? http://www.peercointalk.org/index.php?topic=2783.0
Sunny King: For the protocol there is two items currently active, one is cold minting, the other is improving minting incentive
Sunny King: yeah
Ben: "Improving minting incentive" -- this will be an item that will get a lot of talk after this interview, I'm sure. Can you tell us about it?
Sunny King: If we get these solved I think then we could reach very high network security levels
Sunny King: Currently the minting participate rate is still relatively low I think
Sunny King: It's getting a lot better than say a year ago, but I think we could do much better even
Ben: Do you actively mint?
Ben: If you
Sunny King: I have a proposal that maybe switch to a constant mint per block would significantly improve participation without too much impact to inflation model. However this is something the commnity needs to reach a level of consensus on
Sunny King: It's sort of also works with sigmike's cold mint proposal, so reduce minting risk + better incentive
Ben: Interesting direction. If the per-block reward was constant, would you also look to make modifications to the min and max coinage used in the calculation
Sunny King: that should give peercoin network much stronger security.
Ben: Would you be willing to address this in greater detail as part of a forum topic, if I opened one up? I don't want to overwhelm you with all of the questions that come to mind about it, but I want to make sure the community is able to see what's going on in your mind, and then start the conversation about it.
Sunny King: Proof-of-stake remains the same, only the reward changes a bit. so you can't sit on large sum yet still get 1% after many months, while not protecting the network
Sunny King: Sure we would discuss it later in forum
Ben: Excellent. We have time for one more question about cold-lock minting.
Ben: You mentioned sigmike's proposal. Will you continue to be involved in that topic on the forums? I'm aware that a lot of the community is really interested in seeing where that goes
Ben: I think I heard the jaws drop around the World when you mentioned cold-locked minting AND enhancing the minting incentives
Sunny King: Yes I would be involved and would also closely watch it if sigmike starts implementation
Ben: Implementation of cold-locked minting is a bit of a "chicken <> egg" situation, isn't it?
Ben: It would require a protocol change, but to do that, you'd need to pull that into the official source
Ben: Other than forking the repository, do you have plans to add a "bleeding edge" branch that would be updated with proposed innovations like this?
Sunny King: No, it's possible to be implemented for peershare first. But I would prefer that it'd be in a state that's ready for peercoin as well
Ben: I don't know if sigmike is watching this chat right now, , but if you are, that sounds like you've got Sunny's attention
Sunny King: Yeah there will be a development branch besides the master, but for protocol related code change there is a relatively high standard to get into repository since this is a mission critical software
Ben: Absolutely, and as a holder who wants to see the value of my investment and ability to use peercoins continue into the future, I would expect nothing less.
Ben: Well, Sunny King, I'd like to thank you for the time that you've spent with us today. We got through a number of the community questions, and we'll pick up in the near future with continuing to work through them.
Sunny King: Thanks Ben and everyone! It's my pleasure to talk with you all!
Sunny King: So see you guys next time
FuzzyBear: thank you Sunny King and Ben very interesting interview and many points for us all to think on and discuss further
Ben: I expect that we'll touch on Open Transactions again in a future conversation, so if you get a chance please review the idea
Ben: I'll also get the follow-up topics set up for discussion.
Ben: Thank you all for tuning in, and for providing commentary and follow-up questions in the #Peercoin chatroom
Ben: Sunny, I'll be in touch so we can schedule the follow up interview, and then I'll get that information out to the community
Ben: I'd appreciate feedback from the community about this interview, and how the format worked. Please don't hesitate to send me a PM with your comments and suggestions
Ben: A transcript will pull together soon, and posted here on PeercoinTalk.org
Sentinelrv: I will get the transcript out before tomorrow morning. Thanks to Ben and Sunny!
Ben: "This interview has been brought to you by: PEERCOIN and PRIMECOIN -- Official sponsors of the future of human finance"