I’m so glad that some people could clearly explain the flaws in the percent question. And thank goodness someone showed that despite your profit being higher, everyone’s purchasing power remains the same.
Naturally, there is something from this that falls out though (people who are fervent followers of the Austrian School of Economics may want to cover your ears): and that’s the effect of Monetary Velocity.
In this particular case, if PPC was to be used as a transactional vehicle (rather than a store-of-value), then indeed the person with the most coins “wins.”
Before I get into that particular argument, let me address that my starting basis for this argument is that in order for any currency (including) to successfully thrive, it must either be pegged to something of static value or be used for widely-accepted transactional purposes (i.e., the gold vs. cash analogue). From what I’ve seen and experienced on these forums, it sounds like PPC is intended to be transactional rather than a store-of-value. (As a note, most crypto-currencies directly show the effects of Monetary Velocity in an incredibly accelerated process akin to penny stocks: pump-and-dumps, FUD, and other types of hype. It’s pretty crazy honestly.) Take away the premise that PPC is meant to be transactional, then this argument fails to hold weight.
Anyhow, back to the why the rich “wins.” In a nutshell, it’s because they have no impetus to move their stores of PPC. Yes, we know that market return rates are substantially higher than PPC’s 1% (technically, PPC’s true inflation rate has to be higher than 1%, more on that later), but that is assuming a stable pegged rate between PPC and USD. Still though, even if there is a relatively stable rate (fluctuations at the level of 33% of gold), we’d have something just at market return rates for a treasury-grade A bond (due to the fluctuations). [I’ll try to give a screenshot of this analysis later.] And many investors have a small divestment into something stable like bonds/low-risk (or even risk-free) securities. So it’s likely that there would be some users that would use PPC as a store-of-value.
So this rich person wins because of the way PoS works. The person that uses PPC as a transactional vehicle wouldn’t be able to build up the same level of stake as the person who uses PPC as a store of value (which would be the rich person). Let’s say that the “normal” person only is able to put only half of their PPC into stake. Then that person only receives 1/2% whereas the rich person gets 1% per annum. Compound this with the lost value from transactions that the normal person would incur and not the rich person, and the effect becomes even greater.
All in all, the rich person ends up getting truly “richer.”
With that being said, despite that significant issue, I still very much like PPC and can see the value of it’s use. As with most things, you can’t have everything you want, but PPC is able to take care of several very key technical aspects and will continue to show great promise.