Yes. Unfortunately it has and the community seems to have dissolved as well. Not very comforting, actually. Nevertheless I like the idea of it, being a pure PoS coin and smart contracts platform. The features are quite interresting.
Yes, it seems we have something different in mind. I was not talking about the blockchain, I also did not question it. You are right with that statements about the blockchain and fees on that level, I see it the same way.
But for a coin the blockchain is just the vehicle, the technical ground. It needs quite a few things more to make up a useful and successful coin (and most of it is not related to technical issues). The old concepts, as you call it, are not only old, they also have proved well over generations of human beings and trading. And yes, I think they apply as well to digital currencies and markets as they apply to all other markets. Ignoring them would be a huge mistake I guess… that’s why I argue
pure pos coin are shite. Think about who the original coin holders are and how they got their coins: it cost them no tangible resources just thin air. Hence all pure pos coins are to be kept at a safe distance
Why? Just because the inventors have the advantage of earning the most coins? That is the same for PoW coins either. You can mine with your laptop as many as you like, before announcing them… so usually the inventors of the coins hold most of the coins in both systems, PoW and PoS. They’re even making this a business model nowadays ;).
In the case of blackcoin it seems there was a pool and everyone could participate in a one week mining phase to generate all the coins. So they were distributed among the miners in that pool. It was scrypt PoW… But of course you needed to follow the bitcointalk threads closely to know that, which most people don’t.
Otherwise I don’t see a disadvantage over PoW or combined. The pure PoS serves the same purpose as PoW: keeping the blockchain alive. But it does it at a much lower cost and all by itself. If we take the real value of a coin as the value of the blockchain underneath (: for enabling distributed ledger services), then you get more value for the coin with a pure PoS coin than with a PoW or combined coin. So, PoW is the steam engine and PoS is the next level, the combustion engine. Or even next to the next level: the electric power drive. No question what survives in the end.
In pure PoS systems, new coins only go to existing coin holders. In a hybrid system like Peercoin, PoW injects a small amount of new coins every year into the ecosystem outside of existing holders. These new coins are sold on exchanges by miners and can go to new holders, rather than existing holders.
This continual distribution improves the decentralization of the network over time as it creates new minters that can provide security for the network. Pure PoS has no inherent mechanism to improve distribution and decentralization except hoping existing holders sell their coins on exchanges to new holders.
Also, pure PoS coins are subject to the nothing at stake attack. Our vision for Peercoin and a fix for nothing at stake is letting the majority of blocks come from PoS minters while a minority come from PoW miners, which will inject some entropy into the system. Here are a couple quotes from our core developer @hrobeers…
I believe it was Nagalim who gave me this example one time. Imagine a flower that throws off new seeds. Those seeds spread and eventually produce new flowers around the forest. The same concept holds true with hybrid systems. PoW helps spread new peercoins, which eventually produces new security providers around the world, strengthening decentralization of the network.
And yet another reason, Peercoin is currently set to take over the mining industry from Bitcoin due to the algorithms being the same. As miners are no longer able to compete, they will drop out and mine Peercoin instead, giving new use to their outdated machinery. The increased hashrate also has the effect of driving down Peercoin’s PoW inflation rate.
Fair enough, there is thruth in that. I agree to the theory.
But well… I was mining peercoin, about 4 years ago. I had recent equipment at this time, ten ASIC USB sticks and a raspberry pi. The ASICs were horribly expensive, and outdated as fast as in 2 weeks by the amount the difficulty grew at this time. I mined mostly peercoin and some bitcoin, from which I converted some to peercoin. I tried different pools, none of them is available anymore. Even the online exchanges from this time have mostly vanished.
In the end this mining was a horrible loss business. I gained something between 10 and 20 ppc in a time interval of 4 months, and by the exchange rate much less than I spent on the mining equipment. If I had simply bought ppc from the money I spent in the ASICs, there would have been much more left (and if I had done that over the last 4 years while the exchange rate was low, I would have gathered quite some wealth by today… damn)
Anyway, my mining attempt was an experience and a lesson, not more. Mining is simply a loss business for most of us, while buying at exchanges is the better option.
That suggests that buying coins would possibly lead to more spread and enthropy, just because there are more people who can afford buying (at least some) coins than people who can afford mining. And as it happens, you can buy pure PoS coins at exchanges too and the rates behave the same. So if many people buy some PoS coins and start minting, the distribution of hashing power would spread towards more decentrality. Additionally the demand/supply mechanism of market dynamics finds good exchange rates. But it needs good marketing and infrastructure, and usefulness. For instance, usefulness as an investment with comparatively high PoS returns .
PoW mining in turn always leads to a centralization towards single instances with much hashing power. The big (chinese) factories at places where coal energy is cheap. And the holders of this hashing power are the ones who get the coins. This means there is no wide spread distribution either.
So the model you suggest is working just in the beginning - when the coin is neither known nor wide spread, when the difficulty is low and everybody can mine easily without much efford. But as soon as this period is over, that means when the coin becomes recognized and the exchange rate rises, the PoW hashing rate starts to centralize and this kills the basic idea.
This was an argument already 4 years ago. The truth for me was however, that mining bitcoin was always more profitable than mining peercoin. And then changing the bitcoin to peercoin, since I liked ppc more.
Clearly many miners think in therms of profitability, so they might experience the same. But will probably just keep the bitcoin and cash it out…
Bitcoin’s mining is expensive - why, therefore, is Peercoin’s mining not similarly expensive? As I understand it, mining cost/difficulty increases with demand - would this not also affect Peercoin?
Because of our dynamic PoW block reward, Bitcoin miners switching to Peercoin over time will help drive that reward extremely low, meaning less profits for miners. Also, our miners do not receive transaction fees since they’re burned, so the block reward is all they receive. Less profit for miners will most likely result in there being less mining and energy expenditure, which would make Peercoin mining more efficient than Bitcoin.
I highly doubt this will happen. Even if peercoin has the same marketcap as bitcoin, i doubt we will see this occur. Only if peercoin’s marketcap is much bigger than bitcoin will we see the turning point.
Mining is for profit. We will see the turning point when the rewards are equal. So the condition is:
As ppc reward decreases with hash power while btc reward only decreases discontinuously over a long period of time, and btc fees only seem to go up with time, it would require a very high ppc price to see this turning point occur.
This is actually a good thing, because this turning point also implies that peercoin’s energy consumption would be overtaking bitcoin’s. That will not ovcur when their marketcaps are equal, but instead only when peercoin has a much larger marketcap than bitcoin.
Can you explain this? I understand the value of continual distribution and decentralization. But how do PoW blocks ensure the PoS algorithm’s security? If the answer is just more coins in new hands, it seems like a very indirect tool given modest minting participation rates.
I suspect this might be out of context, and the fuller thought on nothing at stake is: “Even our PoS algorithm can [be gamed], but the gains are so small that it’s not worth spending time to do it.”
The reference is to the stake modifier which determines who gets the next PoS block. PoW implies a randomness that makes it even harder to control bits of the stake modifier. That said, it is already very difficult to control bits of the stake modifier with the current distribution, but it is certainly arguable that PoW still contributes to security in this very indirect way.
Pure proof of stake requires the adversary to control at least 51% of the staking coins.
Proof of stake with mining as in Peercoin requires the adversary to control at least 51% of the staking coins as well as at least 51% of the mining hash power. This is due to the mining blocks being included in the sequence of blocks. The adversary must somehow compute the proof of stake blocks as well as any proof of work blocks that are intertwined. However, these mining blocks do NOT contain transactions.
This isn’t quite accurate. I get what you are going for here, but you can easily have 6 PoS blocks in a row. The chainweight is only dependent on PoS, so one can mint a chain in private with 51% minting power and unleash it to overwrite any PoW basically for free. Sunny King would say that PoS is entirely responsible for the security of the chain.
We considered doing something like that, but ultimately adding a single PoW block to your attack chain isn’t very difficult so you dont get much in the way of security, on the other hand it may take a while on average for people to get the PoW confirmation. So the result would be that txns would take longer to verify without getting much payout in terms of security. You would likely get more bang for your buck by simply increasing the number of blocks you wait for to 8 or something like that.
Why is the proof of work block not difficult? So anyone can generate a proof of work block and collect the reward? The minimum should be that generating the proof of work block requires computation corresponding to the mining difficulty. Also, the mining blocks should not be generated independently of each other, that defeats the purpose of a chain?
So what is your meaning here? Why is it NOT difficult?
What is meant by proof of work confirmation in this context? On average of what metric?
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