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I don't think it is a good idea to bet on constant growth. Decreasing transaction volume does not necessarily mean that people loose interest in the currency. During a financial crisis transaction volume might explode just because of volatile prices. As soon as the volatility caused by the crisis calms down, so does transaction volume.
You have more than one of these "one-way" assumptions in your design. GDP(MAX_CONSENSUS_YEAR) is only one of them. Monotonically increasing money supply is another.
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int MBAward = GetNetworkGDP(MAX_CONSENSUS_YEAR) / 12 * 0.0001;
GetNetworkGDP? In an earlier post you "defined" GDP as on-network transaction volume, right? Let's say the "network" GDP (on-network txes) is DCR1billion. 50m txes if the average tx is 20 DCR. Something meaningful must be awarded, let's call it 1 DCR. And we want to award txes within a 30 CD window of the MB, a 1.67m tx window. We want to award 10% of those. 166.7k. If we want to award at least 1 DCR, we must have 166.7k/10 or a 16.7k MB award. We're increasing the money supply 183k/500,000k (huge guess that V = 2, but what else can I do?). 16.7k means about 8-10k minters are ready and willing to create money. Is that too low? 183k/500m is a really small percentage, and 8-10k minters seems low, but if each active decrits user spends 1k decrits a year, that is 1 million users, so the minters are about .8-1%. That seems quite reasonable. How much in transaction volume do we wait before allowing a MB to be created? The same 30 CD period or perhaps a 10 day period as that is about how long a MB is intended to take?
//We take the highest network GDP all-time (in case off-network txes become more popular),
I guess by off-network txes you mean things like 'gox redeemable codes? What happens if there's an intermediate run on DCR? If your money supply algo is not 99% perfect, there might be deflationary times and a bubble might rise. Transaction volume goes up for a limited amount of time. Your all-time GDP goes up. The bubble bursts and transaction volume is back on a fraction. So in addition to the bursting bubble you're making it worse by inflating money supply. // divide it into a consensus month, and multiply it by the transaction fee
//Max GDP updates on a rolling, quarterly basis (every 90 CDs)
alright, this might calm things. But it also slows adaption to changing circumstances. //Even though a MB is designed to last 7-10 CDs, 30 CDs of tx data is used to make it more difficult to start and/or game a mint block
int TxFreeMoney = MBAward * (5 + GetConsecutiveMBlocks());
int AcctFreeMoney = MBAward * (5 + GetConsecutiveMBlocks()); // = TxFreeMoney;
I need some naming guidance. AcctFreeMoney? What is GetConsecutiveMBlocks()? int TotalAward = MBAward + TxFreeMoney + AcctFreeMoney;
if (GetNetworkTxFees(PRIOR_CONSENSUS_MONTH) < TxFreeMoney) { //This removes incentive to "game" the award
SavedMoney = TxFreeMoney - GetNetworkTxFees(PRIOR_CONSENSUS_MONTH); //We will distribute SavedMoney over time
TxFreeMoney = TxFreeMoney - SavedMoney;
}
MoneySupplyIncrease = TotalAward / GetTotalMoney();
//Should be a pretty small amount until we start getting into 10 or more consecutive blocks
How far do you want me to take this?
further. |
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Synechococcus bacteria, solves the problem of too much carbon dioxide in the atmosphere, we found the answer to this problem years ago.
Even if that would be true and these bacteria would solve our CO2 problem without causing even worse side effects (hear my doubt?), there would still be the other side of energy supply: limited resources. |
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Flaff made a point that I think this entire debate was missing. Yes, mining bitcoins has a price beyond just the cost of the ASICs, in electricity. But how much energy do all the banks in the states use, not even counting the ones elsewhere in the world? You could count just the energy the banks use directly, but I think it'd be more fair to count the banks' energy, the energy used by the armored cars transporting money, that used by the Federal Reserve, and so on and so forth.
I tried to estimate this in this previous post. You are right that one should compare it to today's banking usage. But keep in mind that banking is not just about issuing and transferring money. There are services included that bitcoin doesn't supply and never will (funds/asset management, customer services, loans....) In other words: how much energy does PayPal use? Even if credit card transactions are being done and not PayPal transactions, they are often still using PayPal as a credit card processor.
So the question to me isn't, does the bitcoin network use energy? But rather, does the bitcoin network use more energy than the traditional financial network? And, would it use more if it scaled up to the volume of, say, Visa and became a replacement for Visa in many cases.
I would be very interested in the figures, but they might be hard to get. But please read my linked post. If you can show me with quotes to reliable sources that the ratio of (paypal transaction volume)/(paypal plus credit cards energy use) is better than in the case of bitcoin, I'll be more than glad to change my opinion. I came to the conclusion that bitcoin's ratio is worse by orders of magnitude. |
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Trying to move the PPC discussions to the new PPCointalk.org. In my Post on PPCointalk I'm elaborating on value stability in the case of PPcoin. My intermediate conclusion is that PPCoin might be even more volatile than bitcoin because of its design. Please come over to discuss. |
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May I interrupt your little fight? A clash of two egos mixed with 10% discussion on the real matter is very annoying to follow for anyone else. Both of you seem to be bright minds, so please drop the bullshit.
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brenzi, welcome back. You owe me a reply.  Yes I do. But IMHO the moment has come to nail your ideas down. At least as a reference for discussions. If we could move from prosa to math and pseudocode I'd be pleased to help reviewing. |
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The only proposals I know of:
1. Proof-of-Work based on computation, i.e. Bitcoin and Litecoin, which favors specialized hardware
2. Proof-of-Stake, then no one who doesn't own already can earn coins
3. Proof-of-Work based on harddisk space (my proposal), which hopefully puts existing PCs on more level field
4. Decrit's combo of Proof-of-Work with some filtering mechanism that makes no sense to me so far.
5. Proof-of-Reputation (I forget the name), where people give rep power to each other
I'd add 6. Proof-of-BurnOf course, you need to already own coins to be able to burn them. But replacing real-world resource use by virtual resource use makes sense. PoB is often cited for transfers from one coin to another, but maybe there's also a way to base a currency on it? |
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I'd appreciate to see a stablecoin developed that is as free from speculation as possible. There are many get-rich coins, but I'm not sure if they will ever settle to a stable or at least slowly changing value.
The most obvious way to achieve a stable coin would be to peg it to a fiat coin. This way users (people wanting to use it as a currency and buy real stuff or services) know what they get.
Even more stable could be a weighted pegging to a selection of different fiat coins.
Now to the 1million$ question. How to get fiat exchange rates in a decentralized way, free of manipulation?
The only convincing approach to me has been implemented by ripple.
Even if people are speculating with the value of XRP, the more interesting feature is the use of IOU. As I understand, XRP are not meant to be a currency or a commodity. They're just there as an intermediate means of transfer. Value doesn't need to be stored in XRP. I hope the server will go open source soon.
What makes me hesitate is the reliability of IOU's. As they are dept, not value, they're prone to default. A 1$ IOU is worth 1$ minus the risk of default. Probably we'll need to observe ripple for a little longer to see how things work out.
Apart from ripple, I'm following etlase's decrits proposal. And PPC seems to be an interesting alternative to bitcoin as a playground for speculation. Free of the latter's energy hunger.
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once ripple would hit critical mass, it could actually be a reliable reference for a stable coin. Exchange values between various currencies could be read from the LCL. This would allow to develop a fiatcoin approximating a certain fiat currency without a single trusted information source. This could possibly be done without being directly integrated into the ripple protocol. All we need is reliable read access to the LCL. Probably not possible until ripple server goes open source...
Very interesting. Thanks red for digesting the key elements for us.
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don't sweat the small stuff. The whole thing can be forked with a) very low PoW weighting b) no transition to voting at all c) a different long term inflation target. These are parameters. If this system works you will see copycat forks with other parameter choices.
Where is the major difference to PPC then? (apart from being developed by somebody else, maybe a little more transparent) The most important issues are the security of the protocol AND the currency's feature set. I'm not saying PoB can't work, but it is a) not as well fleshed out as this idea b) doesn't offer benefits beyond what is obtainable via parameter tweaks.
to a): You're right. But I really would like to see this concept worked out and being implemented to b): Well, wasting virtual resources (coins) instead of real ones to me is a BIG advantage. |
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- After 27 coin years it employs a system of voting to manipulate the interest rate of the block chain (users act as the central bank and regulate the rate of inflation)
You're assuming that the users of your currency know best what is good for them. (1) I think this is not true, because complex systems are not easy to understand. Even scientists are struggling when it comes to economics. (2) Even if you find a fair voting procedure you will suffer from a very democratic dilemma: Why would a majority vote for the interests of a minority, even if the interests of the minority are more existential and deserve protection than those of the majority. Some people will vote for value stability and adjust inflation to achieve it. Others would prefer the value of the coin going up and get rich. I think this should better be decided by design. There is a market for both, so most probably there will be at least two major cryptocurrencies in the future: One with fixed supply, eventually implementing a minor inflation. This would be cyber-gold. A commodity One with stabilized value. Optimal for day to day usage. A currency - New block reward adjustment algorithm is given that yields an 8% decrease in block reward per year
Does that mean that miners will successively live from transaction fees, like in bitcoin? This is important for my next remark. - PoW and PoS systems are designed to happily coexist, with favour slightly given to the PoW system
If you favour PoW, you sacrifice an achievement of PPC being energy efficiency. Your coin will suffer from a scaling problem due to energy consumption.Have you thought about using PoB? |
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Thanks for your detailed explanations. Let's say the MB award is 50k decrits. That means at the first block, 550k decrits are produced, the second 650k, 750k... 1450k (based on increasing multipliers described here). All in all, minters create 500k decrits while 9.5 million are given away. I'd appreciate it if you could set up a documentation page/wiki. Your references to other posts tent to be tl;dr. Especially if you only want to reference one sentence out of a long post. Pseudo-code of your algo would be very nice. OK, your increasing multipliers indeed address the problem of energy consumption. I didn't get it right before. But if your control algorithm for money supply reacts exponentially to demand, You are very likely to overshoot your target supply. Let's bring in some control theory (Yes, I love to apply it to economics): A PID controller is very stable, if correctly tuned. As I understand your algo, it compares approximately like this: P: Not used in your design I: Is your link to energy use that should stabilize Decrits value in the long run. D: Is what mainly determines your MB award and giveaway multipliers. As you even put an exponential characteristic to it, you should expect heavy overshoot. As Decrits money supply is monotonically increasing, one cannot really compare it to a control algo, as there will never be a negative delta on money supply. This way your money supply cannot oscillate around the target value but will just be stuck after overshooting and wait for reality to catch up (if it will). I can't say for sure that it won't work out. But I suggest that you really simulate your money supply algo. If you give me pseudo-code (or write it in octave right away), I might be able to support you with this. |
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It's not really proof-of-burn as described in that wiki page. You aren't giving up any currency, just a smaller proof of work.
To avoid misunderstandings, I'd replace or explain the word "burn" then. You are building quite a complicated scheme to to avoid a hardware-upgrade race which I'm not convinced that it really works the way you intend it to (ASICs compete with ASICs, GPU with GPU). Being engineer I tend to believe in simple solutions. Complicated solutions usually do not behave well in unforeseen situations. Let them build ASICs. Let them adopt whatever new technology. Just make sure that the energy use stays at a reasonable level. High enough to get your link to real world basket (if it's too low, people might find ways to get the energy "for free", like electricity thefts) , but low enough not to really matter ecologically. But looking at Decrits potential energy use I fear that the problem I pointed out earlier for the case of bitcoin is not solved entirely by your proposal. As Decrits shall have a stable value, energy use for mining doesn't rise with the coin's value like in bitcoin's case. Instead, you're proposing to adjust the mining reward (in number of Decrits) to the demand for the coin. So if demand rises, energy consumption rises. Then you propose: B. Producing Energy Efficient Currency All of the difficulties associated with minting are in place so that new currency is created only when the value of Decrits are profitably above their cost to produce. However, this is not at all energy efficient. To provide energy efficiency in currency creation, free money will be distributed to users of the network (not minters) based on minted money. 5x the MB award will be given to either the sender or receiver of a random set of transactions during a certain time frame before (and potentially after) the MB based on multiples of the tx fee; 5x will be awarded to a random selection of accounts based on each account's percentage of the total amount of currency in existence. If a second MB is started within a time window of the first, these multiples will increase to give out more free money in response to network expansion. More details: at the end of this post and here. Giving 10x the award to somebody else than the miner is just a leverage ratio to energy use but it scales all the same. But I see you propose to adjust this ratio according to the number of transactions. Can you provide more info on this adjustment algorithm? How can you make sure that energy use stays at reasonable level? |
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Either it will be so awesome that interest does not decrease, or it is on the path to failure.
What about the the limits of growth? If you think big you might come to the point where global economy is not growing anymore - or even decreasing at times. But you might be right to leave that point unsolved. However you'll do it, it will cost adopters. |
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Thank you for this very interesting proposal. Unstable value and excessive energy consumption to me are key disadvantages of bitcoin. A. Producing a Mint Block (MB) A Mint Block is a potential block of money that can be created by the network if several prerequisites have been met: 1) Sufficient transaction activity has occurred since the beginning of the last MB, 2) The current/prior MB has been completed, and 3) Between 5 and 10% of the MB's monetary award must be "burned" by potential minters in a limited time frame to join the Mint Block Queue (MBQ) to create new money. The MBQ is joined individually by those wishing to create currency and each queuer will be assigned to create 2-3 coins. A full MBQ proves to the network that sufficient demand for new currency exists and sufficient power is ready to create it. More details. These restrictions place a brake on unbound monetary creation. So you're using proof-of-burn to allow minters into the MBQ. But then the coins are minted by proof-of-work. Do I get that right? C. Achieving Stability and Reducing the Hardware Tax The intent of the complicated process of minting currency is to provide a stable cost to produce new currency. This in turn, I believe, will result in a reasonably stable value when compared to other commodities--perhaps even providing a stabler value compared to the whole basket than many or most other individual commodities. This requires a deeper explanation for the reasoning behind the design decisions which will be provided in the next post.
I think I see how you plan to achieve a stable value. Not exactly linked to fiat but linked to electricity cost (I'm not sure that this represents the whole basket better than national fiat currency). This way you adjust the speed of minting, but the block reward is always positive, so money supply is monotonically increasing. How do you ensure stable value when interest in Decrits decreases? I didn't find any means to reduce money supply in your proposal. I see three possibilites: - self-adjusting demurrage rate. Affects all accounts. Might lead to a stable exchange rate, but not to a stable value in the "whole basket" sense
- extra transaction fees sent to nirvana. Affects only money in circulation and punishes those who are still actively using (spending) the currency.
- fixed inflation. The currency would not be stable in the long run, but would at least degrade in a more predictable way. Only works until more "value" wants to leave the currency than is destroyed by inflation anyway
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Repost from here. Was the concept of "Stake Mining Pools" discussed? Perhaps using some protocol feature to ensure the pool can't steal my funds, but only sign? I don't want to keep a live wallet open, but I want my funds to generate interest for me and contribute to network safety. The obvious solution is pooling funds at one very secure wallet ... but there has to be features that prevent theft by the pool operator. I wonder if pooled PoS mining is in the interest of the PPC network. If pooling would reach the same popularity as for bitcoin, a 51% attack would be a risk for PPC. Why would you want to pool anyway? PoS mining is a lot "easier" than PoW and PPC would be more secure if there are a lot of small miners than only a few pools. In fact, pools for PoS mining would be almost the same as banks. As I understand decentralized currencies are much about bypassing big banks (apart from central banks obviously) |
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I don't know any exchange that is quicker than that. mtgox is unable to handle the massive increase in bitcoin users, so don't expect to get your money sooner than 2-3weeks delayed.
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