These are just some suggestions for our future.
There are a lot of discussion about the 0.01coin/kb destruction, and I know that we are trying to have a more stable price and to become the backbone of the market, like a trusted treasury.
In the discussion below, I will discuss about our problems in liquidity and destruction of coins, and the new method that in my opinion will benefit us as a whole:
First of all, with our current system, we are trying to make people hold the coin as long as possible, which is good for some people. However, a trusted treasury & financial system also needs liquidity and volumes on the market. Without liquidity, the price will fluctuate so much when so little is on sale, this will make the coin not so trustworthy in time of needs. So, holding the coin for a long period of time has its good and bad. Too long will hurt liquidity & trustworthyness. Too short will hurt trustworthyness too when it makes the market goes wild.
We want the coin to behave like a treasury note, sure. The purpose of treasury is to increase the flow of money. The government promising an interest so that they can give a higher interest loan to businesses and entrepreneurs for the purpose of growth. Again, the focus here is to increase the flow of money from the bottom up then to the bottom again for growth (Afterall, businesses and entrepreneurs are what drives a community), and we need to make the money flowing as liquid as possible, as low commission as possible to induce growth. We will need to increase the number of stores we can spend the coin to, and this requires low commission and no destruction of coin at all. People hate losing coin, and with the destruction of coin, every transaction feels like a punishment. This punishment is good that they are saving money, at the same time it is bad because it punishes them for doing anything. Doing nothing is not a good sign of growth.
If a currency like gold is what we want, please note what warren buffet says. He says that we can accumulate as much gold as we can, and then bury it underground, and it does not mean anything in the end because the gold does not produce and bring progress. I love the proof of stake, but we need to embrace change and progress.
------------------------------------------Below is the conclusion of our discussion at the end (Spoiler)----------------
I’ll wrap this discussion up ppcman,
Thank you Sentinelrv for the accurate, and as pillow said, “THE most comprehensive” explanation for people’s concern regarding the transaction fee. In the beginning of this discussion, I felt that we had a need to lower the transaction fee for supporting microtransactions. However, after further in depth discussion, Sentinelrv had made great points, and I also come to realize that reducing the transaction fee is not necessary. The transaction fee is what makes Peercoin great and in the future, survive above all the other cryptocoin. Below is the summary of our discussion:
1 . If we are looking to process micro-transactions with smaller fees, there are solutions: [quote=“Sentinelrv, post:13, topic:4504”]
Peercoin can take advantage of second layer solutions such as the Lightning Network, which would allow Peercoin transactions to be conducted off the blockchain, bypassing Peercoin’s fee entirely. Lightning would make it possible for Peercoin to support large volumes, instantaneous transactions and micropayments. It’s basically a way to off-load the majority of the transactions onto a secondary layer that is providing a service to the network. After performing lots of transactions, Lightning would then settle on the blockchain and record the changes. This way as minimal transactions are taking place on-chain as possible.
And also as mentioned above, Peercoin is more compatible with Lightning and other off-chain networks than Bitcoin is because with Peercoin they won’t compete for fees with the ones who provide the security through minting. On the other hand, off-chain networks and Bitcoin miners will be in direct competition with one another for fees. It’s already uncertain if Bitcoin can make it after block rewards decrease to zero. This just complicates matters even more.
Why do we need to use off-chain solution, why don’t we simply use Peercoin network to process the transaction?
My thoughts after reading the above: Yes, Bitcoin is already on its path to centralization, and centralization is not the reason why bitcoin was created in the first place. Its blockchain size is already 110GB due to their low transaction fee in time of this writing (Check it Here), unsustainable BTW if everyone has to use that much space in their hard drive. This much space will deter Full Node adoption and increase centralization for Bitcoin; Things will get out of hands very quickly and by surprise for Bitcoin, especially with the possibility of 51% attack. Everytime 51% attack happens, people will panic sell, and investors will lose values over and over again. However, Peercoin overcomes all the above, after 5 years it only has 600MB (0.6GB) of blockchain size, and peercoin is shielded from the terrible 51% attack with its Proof of Stake System. We should thank the 0.01 PPC/kb for keeping our blockchain size small, safe, and promoting decentralization for the longer term. Blockchain is definitely not made to do smaller transactions, and if they do, they are doomed to fail very early, as fast as it is adopted.
2 . Peercoin is like a “Vault” in Coinbase (If you use coinbase.com at all) or the bank. It is meant to protect your digital assets for the longer term. Other cryptocurrency will not survive in the longer term because of what we have said in point #1. They will fall as fast as they are loved, and people will lose so much value for this very reason. While peercoin has been designed for the longer term as said in Point #1, and it will be very decentralized for a long time due to their minting incentives.
3 . Minimum Transaction fee is also adjustable (not fixed), giving a lot of options in the future.
4 . I did say that Peercoin as a “store of value” is a bad thing because it does not mean anything, not backed up by anything, not bringing progress to anyone. However, now, I think of Peercoin as a “gateway” to the digital currency world, one that will not fail me and my digital assets. I use digital currency because it is safer than the bank, safer than cash, safer than gold, and for ease of transaction around the world. However, other digital assets like bitcoin and many more are on their way to failure as discussed in point #1 & #2. When other digital currencies such as bitcoin and litecoin fails, they will fail spectacularly and quickly, and losing value is not why I put money into digital currency. I want it safe and secure, and I want to use it one day for transactions or emergencies without having any fear of it losing value. I think peercoin is the right choice for me.
5 . Also note that the more transaction we do, the better the value of Peercoin will be. Every transaction decreases the money supply, and that in turn will increase price for everyone in the community.
Thank you Sentinelrv, savereritt, and Nagalim for the discussion. I really appreciate your time and effort to answer my questions and initially, it was suggestion.