Rise of the Altcoins Panel - Questions

General
1

So I’m down to be part of the panel on alternative crypocurrencies at the London conference next week. To ensure I am appropriately prepared, I would like to request some help in coming up with any questions that I might have to field on the day. I’m doing my own prep in the mean time but it would be very helpful to get other peoples ideas of what I need to prepare as other people may come at this from a different angle to me, and also input on what the answers should be in some cases.
Some of the obvious questions are dealt with on http://peercoinmyths.com/ and also the FAQ, but I’m sure there’s plenty more that might come my way, in particular from people representing the other alt coins.
Hopefully the output of this can be used to enhance the FAQ too.

Some questions which I haven’t been able to figure out the answer to and would appreciate help in answering:

[ul][li]How does PoS improve the security of the blockchain?[/li]
[li]At what point does PoW become unnecessary/unimportant to Peercoin[/li]
[li]When will checkpointing be removed?[/li][/ul]

** Note I’ll update this top post as I get answers and come up with new questions **

2

[quote=“Master K”]- Coin is smarter with fees than bitcoin

  • An early, inexpensive coin that allows the possibility of great returns via early adopti[/quote]

I must disagree with the fee part. I think there are things that should be done about that such as making it dynamic.
And, we should not introduce PPC as a tool to make a quick profit. It is looking as if we are here just for the money. It’s better to present the unique features that PPC has and let the people think about the upside.

So, why is PPC more secure?

I believe it was mentioned a few times that as bitcoin grows, there is less incentive to mine because the rewards get lower and lower but at the same time, the market supply and market cap becomes larger. There will be less hashrate protecting a larger market. In bitcoins, the “gold rush” is still protecting the network but when it’s over, the network will be less secure. I’m not sure if I said these right but so far that’s what I’ve read.

In addition and in my own opinion, the Bitcoin network is vulnerable because of mining itself. The network could be controlled if somebody has enough hashing power than everyone else. This creates some sort of geographical centralization of Bitcoins. Places who have access to hardware and cheap electricity may in the future dominate bitcoin mining and in turn, manipulate the blockchain. This is an issue I think is not most recognized. PPC solves this geographical problem by distributing coin generation power to anyone, anywhere, whether you have expensive or cheap electricity, or even homeless. That’s what attracts me to PPC so much. People might say that the PPC network could be comprimised if somebody hoards coins with the intention of controlling the blockchain but that would be so much expensive and risk the attacker losing money that benefitting from it. If the attacker buys coins, he is essentially giving the market purchasing power as the value of each coin goes up - which is good for the honest users lol. If he finally is capable of attacking the network, most people would not have coins and so the impact is lesser. And then, when he does attack, people would lose trust in these coins and the value will quickly go down to perhaps zero. In the end, the attacker is left with coins he purchased which is essentially of zero value. There is no point in attacking the network. Therefore, it is much more expensive to attack the PPC network and it’ll get more expensive as the market cap grows. That makes PPC’s security grow as the market capitalization rises while BTC’s security taper.

3

Lumierre, your comment “[…]even homeless” triggered a thought.

If we could come up with a mobile- or hardware-based wallet protocol, that allowed a secured form of PoS, not only is that a true statement, but it’s better than any bank in the entire World can offer you – you gain interest on your holdings, regardless of geographic location.

4

I would not be surprised if you are attacked with a “how can you defend a coin where the rich get richer” argument. I broke down the real economics of it here http://www.peercointalk.org/index.php?topic=940.0 and you made a good point about PoW mining too. Might be good to have that argument in your holster.

5

Yep I spent more time on that this morning (see Cryptoblog - notícias sobre bitcoin e criptomoedas!) I think I can handle that one pretty easily now.

6

[quote=“lumierre, post:2, topic:881”]So, why is PPC more secure?

I believe it was mentioned a few times that as bitcoin grows, there is less incentive to mine because the rewards get lower and lower but at the same time, the market supply and market cap becomes larger. There will be less hashrate protecting a larger market. In bitcoins, the “gold rush” is still protecting the network but when it’s over, the network will be less secure. I’m not sure if I said these right but so far that’s what I’ve read.[/quote]

So I get that point, which is a reason why PoW is not a foolproof way to secure the blockchain. But I’m still not clear how Peercoin’s PoS secures the network better.

7

Proof-of-Stake protects the network better because it relies on coins that already exist (or that will exist), rather than an artificially created “mining” market. Whereas Bitcoin requires at least some participants to take the role of a “miner” to ensure that the blockchain is validated properly, Peercoin could, in theory, lose all of it’s Proof-of-Work participation tomorrow, and continue to validate the blockchain through Proof-of-Stake exclusively. Because anyone who holds PPC is effectively a “miner,” it ensures security, even if none of those coin holders actually ran ASIC rigs to generate Proof-of-Work rewards.

In the first case, Bitcoin’s network security would collapse, in the second, with Peercoin, we’d see a marked reduction in the amount of coins coming into circulation, but the security of those transactions would not be compromised.

8

I liked this so much i am putting this in the news header as a Quote of the week :slight_smile:

“Peercoin (now and) in the future has a plethora of miners all over the world because mining is done on layman personal computers (i.e., everyone holding PPC is incentivized to mine for stake because it’s easy to do and a guaranteed increase in personal wealth). This highly decentralized and dispersed group of miners = significantly low chance of manipulations.”

Fuzzybear

9

well i dropped the whole quote in on the mining section for now :slight_smile: so its there to stay, need to consolidate the information again really in the FAQ with some new info from posts… so much to do!

Fuzzybear

10

[quote=“mcgin, post:6, topic:881”][quote=“lumierre, post:2, topic:881”]So, why is PPC more secure?

I believe it was mentioned a few times that as bitcoin grows, there is less incentive to mine because the rewards get lower and lower but at the same time, the market supply and market cap becomes larger. There will be less hashrate protecting a larger market. In bitcoins, the “gold rush” is still protecting the network but when it’s over, the network will be less secure. I’m not sure if I said these right but so far that’s what I’ve read.[/quote]

So I get that point, which is a reason why PoW is not a foolproof way to secure the blockchain. But I’m still not clear how Peercoin’s PoS secures the network better.[/quote]

Another security feature of PPC is that after generating a PoS block with Peercoins, there is a 30-day “cooldown” period for the Peercoins to be able to generate another PoS block. This increases security because the attacker would lose the probability to generate another PoS block (for 30 days) relative to other people minting.

For example if this was applied to the bitcoin network (which I don’t think is possible there), Imagine that a miner successfully solves a block. He is rewarded but his hashing power is then forcefully suppressed for 30 days. Therefore, he would not be able to solve blocks in succession because his hashrate, relative to other miners, decreases as he solves blocks. The network will be more secure because there will be more randomness of whoever solves the blocks. Because of this, PPC is resistant to 50%+ attacks. Even if someone has majority of the coins, when he generates a PoS block with it, his coins enter cooldown (30 days) thus lessening his probability of generating another PoS block while the probability for other people to generate a PoS block increases.

Please correct me if I’m wrong at anypoint. I wouldn’t want to give misinformation as I’m learning it myself.

11

This is great guys, thanks. How about the other questions on the checkpointing and PoW necessity.

12

[quote=“lumierre, post:10, topic:881”][quote=“mcgin, post:6, topic:881”][quote=“lumierre, post:2, topic:881”]So, why is PPC more secure?

I believe it was mentioned a few times that as bitcoin grows, there is less incentive to mine because the rewards get lower and lower but at the same time, the market supply and market cap becomes larger. There will be less hashrate protecting a larger market. In bitcoins, the “gold rush” is still protecting the network but when it’s over, the network will be less secure. I’m not sure if I said these right but so far that’s what I’ve read.[/quote]

So I get that point, which is a reason why PoW is not a foolproof way to secure the blockchain. But I’m still not clear how Peercoin’s PoS secures the network better.[/quote]

Another security feature of PPC is that after generating a PoS block with Peercoins, there is a 30-day “cooldown” period for the Peercoins to be able to generate another PoS block. This increases security because the attacker would lose the probability to generate another PoS block (for 30 days) relative to other people minting.

For example if this was applied to the bitcoin network (which I don’t think is possible there), Imagine that a miner successfully solves a block. He is rewarded but his hashing power is then forcefully suppressed for 30 days. Therefore, he would not be able to solve blocks in succession because his hashrate, relative to other miners, decreases as he solves blocks. The network will be more secure because there will be more randomness of whoever solves the blocks. Because of this, PPC is resistant to 50%+ attacks. Even if someone has majority of the coins, when he generates a PoS block with it, his coins enter cooldown (30 days) thus lessening his probability of generating another PoS block while the probability for other people to generate a PoS block increases.

Please correct me if I’m wrong at anypoint. I wouldn’t want to give misinformation as I’m learning it myself.[/quote]

Lumierre, so I can be sure I’m following correctly, if I have two transactions that have entered into Proof-of-Stake minting, 100 PPC each, 15 days apart, my wallet is potentially able to solve two PoS blocks, without requiring a 30 day cool down after the the first solve.

However, as soon as one of those transactions has solved a PoS block, the funds used from that transaction (plus the stake reward) are unable to solve another PoS block for 30 days.

Is this accurate?

13

Yes, one could try splitting coins into different transactions but there is no guarantee that you would consume the coin days of each of those groups consecutively. Coin days are only consumed when a stake is generated, right? The attacker cannot use up his accumulated coin days in those different transactions at his desired time.

It would take a very very long time for him to be lucky enough. It may take years and years because every time he fails, he would have to wait another 30-90 days to try it again. We seriously need a mathetician to show just how the odds are against the attacker.

It would be interesting to know how many years would it take for a person with 50% of all PPC to generate 6 blocks in a row. In bitcoin, the probability is 1.5625% and the time to wait for another try is 10 minutes. So to have a somewhat guaranteed 6 blocks in a row, it would take ([100/1.5625]x 10 minutes) = 640 minutes.

In peercoin, the probability is lesser than 1.5625% (since chances of solving a consecutive block decreases when a block is solved) and the time to wait for another try is 30-90 days. So for example, the scenario is that the attacker has 50% of all minting power of the PPC network. The goal is to find 6 blocks consectively. He then splits his coins into 6 groups so that each split will have 8.333% of all PPC. He lets them age for 90 days to ensure maximum success. Assuming all of the PPC in the network are minting at maximum age (90 days), how long would it take to have a guaranteed success of 6 blocks in a row?

Probability of finding the 1st block:
50%

Finding 2 blocks in a row:
[(50-8.333)/(100-8.333)] x 0.50 = 22.72%

Finding 3 blocks in a row:
[(50-8.333 x 2)/(100-8.333 x 2)] x 0.2272 = 9.088%

Finding 4 blocks in a row:
[(50-8.333 x 3)/(100-8.333 x 3)] x 0.09088 = 3.029%

Finding 5 blocks in a row:
[(50-8.333 x 4)/(100-8.333 x 4)] x 0.03029 = 0.757%

Finding 6 blocks in a row:
[(8.333)/(100-8.333 x 5)] x 0.757 = 0.108%

Comparing this same scenario in bitcoin but in hashing power,

Probability of finding the 1st block:
50%

Finding 2 blocks in a row:
0.5 x 0.5 = 25%

Finding 3 blocks in a row:
0.25 x 0.5 = 12.5%

Finding 4 blocks in a row:
0.125 x 0.5 = 6.25%

Finding 5 blocks in a row:
0.0625 x 0.50 = 3.125%

Finding 6 blocks in a row:
0.03125 x 0.50 = 1.5625%

Just looking at this, a 50% attack in PPC has a success chance of 0.108% while in BTC it is 1.5625%. That doesn’t even take into consideration the time-to-wait for another trial. And so…

To have a somewhat guaranteed (~100%) 6 blocks in a row in Bitcoin, it would take ([100/1.5625]x 10 minutes) = 640 minutes.
To have a somewhat guaranteed (~100%) 6 blocks in a row in Peercoin, assuming the attacker let’s his coins age for 90 days for maximum success, it would take ([100/0.108]x 90 days) = 83,333 days or 228 years.

Personal disclosure: I’m no mathematecian so don’t take these words so easily but I hope it makes sense and you all get my point.

Conclusion:
PPC is damn secure.