During my researches, I have read that 1% of PPC is “destroyed” during a transaction. And, to create, balance, owners gain 1% per year for saving PPC
My question is: what is a transaction?
For example, if I exchange (sell) peercoin for bitcoin, is that a transaction?
What if I send my PPC to an offline wallet - is that a transaction - and what if I later send it back to an exchange to use - is that another transaction?
What about exchanges between my offline wallet and my desktop wallet downloaded from peercoin.net - is that a transaction, even though I would be sending to myself?
1) For example, if I exchange (sell) peercoin for bitcoin, is that a transaction?
On an exchange, I do not think so as I don’t think exchanges are actually moving coins around unless you withdraw them. They are ‘crediting’ you a certain amount.
2) What if I send my PPC to an offline wallet - is that a transaction - and what if I later send it back to an exchange to use - is that another transaction?
Yes and yes.
3) What about exchanges between my offline wallet and my desktop wallet downloaded from peercoin.net - is that a transaction, even though I would be sending to myself?
Re 2. Good to stand corrected but sending PPC to an offline wallet is not a transaction in the blockchain.
Unless you create a separate wallet first, move your coins and then put them offline
[quote=“RobertLloyd, post:5, topic:1362”]Thank you for those clarifications
Regarding the 1% interest rate, does it matter where the peercoin is stored? (e.g. offline, desktop client, exchange, etc.)
I assume not, as in practice the peercoin never leaves the block-chain, but I would be grateful for a confirmation[/quote]
Coins that are held without being moved begin to mature because while you can think of them as “living” in the different wallets, they really only exist in the block chain ledger. Therefore, any coins that have not moved from an address after 30 days are available to be used to attempt to mint a proof of stake block.
To attempt to mint a block though, the wallet that contains that address needs to be accessible to the Peercoin network, so, at this time, addresses that have been printed out in a paper wallet, or that are held in cold storage, aren’t going to be able to mint a block.
Is it possible this could change in the future with some update or no? Is there no way that coins kept on paper wallets can ever mint pos blocks? I’m guessing not since you need to be connected to the network.
Unless I’m mistaken, this is what the “cold-locked transactions” feature request covers.
Although it’s nice from an owners perspective to mint off-line, it won’t benefit the network.
The reason for providing the 1%/year is making sure the network is secured by having enough wallets (nodes) on-line which would mint coins/generate blocks in the blockchain. This will only get more important when mining will be less profitable. So in my opinion the only way to implement cold-lock minting is to find another way to secure the network/keeping nodes on-line, otherwise the network won’t survive.
That’s why I was hoping that cold-locked transactions were (or can be) a way to maintain a hot node on the Peercoin network, while being assured that the contents of that address could only be used for minting.
Obviously any time anything is connected to the internet there’s a potential vector for an attack, but ideally, that could be mitigated in some way by the Protocol (something like two- or three-factor authentication plus a strong passphrase).
For 2 factor authentication, if you do some research at trollboxarchive.com/search.php for words like “2FA” you will see tons of people complaining that:
a) They’ve lost their phone or it’s been damaged and have lost their 2FA ability and need access to their account
b) Their 2FA isn’t workin
c) They’ve reinstalled 2FA on a new device, tried to restore a “backup” of their 2FA, but that isn’t working
I’m not saying 2FA is bad. What I am saying is that all of these 2-factor authentication gotchas will definitely need to be pre-addressed, because people will lose their 2FA device or key, or whatever, and when that happens it could cost someone a ton of money.
In fact, I’m not sure that a secondary device is the way to go, but rather, some sort of deterministic passphrase “unlock” code in addition to a separate address passphrase (like there is today). Security is tough to manage, for anyone, but I have faith that there are enough smart people in the crypto community that we’ll be able to figure out a solution for this – it would be cool if that solution then could be pushed back out to the world to fix the current set of 2FA issues, like losing your secondary device.