Proof of Stake with an Ultra Low Interest Rate

[kiklo]

Let say we create a Proof of Stake Coin with an Ultra Low Interest Rate

Yearly Interest Rate is only .0001% (.000001) ,

With such a low rate, many would say there is no incentive to stake.
However at such a low rate, with a little investment it's price per coin can be made very stable or pushed to new heights.

So what would make you stake such a coin?

1.  Would you accept payment in that coin on a monthly basis to maintain a node 24x7 that stakes?

2.  Would you stake just to secure the network and protect your investment while the Price per coin gets higher.
    (Blocking someone else from securing what little interest their was.)

3. Nothing at all make you stake such a coin.

Any other Ideas, what would make you stake such a coin.

Thanks.


FYI:
Just a quick note,
Users Buy & Hold BTC with 0 interest ,
if a PoS coin would increase in value, why would it not receive the same treatment?

[1715149667]

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[1715149667]

1715149667

[1715149667]

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[cryptohunter]

Let say we create a Proof of Stake Coin with an Ultra Low Interest Rate

Yearly Interest Rate is only .0001% (.000001) ,

With such a low rate, many would say there is no incentive to stake.
However at such a low rate, with a little investment it's price per coin can be made very stable or pushed to new heights.

So what would make you stake such a coin?

1.  Would you accept payment in that coin on a monthly basis to maintain a node 24x7 that stakes?

2.  Would you stake just to secure the network and protect your investment while the Price per coin gets higher.
    (Blocking someone else from securing what little interest their was.)

3. Nothing at all make you stake such a coin.

Any other Ideas, what would make you stake such a coin.

Thanks.


FYI:
Just a quick note,
Users Buy & Hold BTC with 0 interest ,
if a PoS coin would increase in value, why would it not receive the same treatment?

I was thinking about this before. If you had enough vested interest in the coin then would you stake or help stake just to secure it. I think people would but then they may get lazy and just rely on others for a while to take the strain. Eventually there would be an issue. Would it be possible though to put some alert in the wallet to show when too few people are starting to stake so that would again increase your incentive to stake.... like a percentage of people staking and it needs to stay in the green of perhaps 50% of wallets staking.... it starts to flash yellow or red as this number decreases below that threshold.

How about if you don't stake at least x% of the time you coins slightly decrease and go to the top stakers or get burned? could that work?

It's kind of weird psychologically. Like if i had a bank that paid me 2% and there was another bank paying me 2.5% I may well not bother to move my money. However if my bank started saying they will take .5% of my money as a fee to use it and there was another bank that was free to use I will move it straight away. I know mathematically that is not exactly the same net gain and loss but I hope you can see what I mean. People do not like their wealth taken by force.

Even then I think there would need to be very good reason to hold or buy this pos coin in the first place. Either the tech or the plans for adoption would need to be very strong.

[kiklo]

I was thinking about this before. If you had enough vested interest in the coin then would you stake or help stake just to secure it. I think people would but then they may get lazy and just rely on others for a while to take the strain. Eventually there would be an issue. Would it be possible though to put some alert in the wallet to show when too few people are starting to stake so that would again increase your incentive to stake.... like a percentage of total wallets currently staking and it needs to stay in the green of perhaps 50% of wallets staking.... it starts to flash yellow or red as this number decreases below that threshold.

How about if you don't stake at least x% of the time you coins slightly decrease and go to the top stakers or get burned? could that work?

I imagine something could be setup to flash , by monitoring the # of active connections & the Difficulty #.
But just watching the active connections and the difficulty would be an accurate indicator.

Noble uses a system where there is a decrease if people don't stake every 2 weeks or so, but their regular rate is 8% ,
Someone else did one where you actually lost coins, it was a major flop.

A Penalty for not staking, leaves a bad PR view,
A reason to stake aside from excessive coin inflation is the goal without a penalty if someone just chooses not too.

Thanks for the comments.

 

[kiklo]

One thing that just came to mind , would be staking games.

On a weekly basis,
whoever stakes a Block with the highest Difficulty # get a $1 in the Ultra Low coin
whoever stakes a Block with the most transactions in one block for the week would also get $1
whoever stakes a Block with the smallest amount per block would also get $1


Would the above entice anyone to stake an Ultra Low interest coin?

 

[J1mb0]

A POS coin with an incredibly low rate of interest?

The question is; is it for a store of wealth or to be used as a currency.

If it is to be used as a currency then inflation in the range 1 - 5% seems appropriate.

If it is to be used as a store of wealth you can achieve low, effective stake returns and stability of supply (neither inflationary or deflationary). WAVES is one such platform - stake rewards are from transaction fees.

[kiklo]

A POS coin with an incredibly low rate of interest?

The question is; is it for a store of wealth or to be used as a currency.

If it is to be used as a currency then inflation in the range 1 - 5% seems appropriate.

If it is to be used as a store of wealth you can achieve low, effective stake returns and stability of supply (neither inflationary or deflationary). WAVES is one such platform - stake rewards are from transaction fees.

The question is; is it for a store of wealth or to be used as a currency.

Actually Both.


 

[Cryptotraider16]

There is great coin with solo pos 10-20%!
http://www.leocoin.org/WhatisProofofStake.aspx

https://coinmarketcap.com/currencies/leocoin/#markets

I hold 100k so i got approx 55 LEOcoin a day and keep sale! I buy them atv0.06$ and 0.10$!

[kiklo]

There is great coin with solo pos 10-20%!
http://www.leocoin.org/WhatisProofofStake.aspx

https://coinmarketcap.com/currencies/leocoin/#markets

I hold 100k so i got approx 55 LEOcoin a day and keep sale! I buy them atv0.06$ and 0.10$!

Leocoin is a rich get richer coin,
LEOcoin Balance    Approximate annual percentage reward
0 - 999.9999              0%
1,000 - 4,999.9999    10%
5,000 - 49,999.9999    15%
50,000+                    20%

This discussion is about staking incentives for coins with ultra low interest rates.

 

[ttookk]

Here's a crazy idea I had a while back:

Think of a coin with fixed supply, but inactivity is punished: Every X number of blocks, a wallet that hasn't been active in some way (i.e. mentioned on the blockchainfor in one of those blocks, either by transactions or staking) loses a small percentage of it's holdings, until a certain minimum amount of dust is reached, which vanishes after the next X blocks, leaving the wallet empty. The amount lost will be paid out to those who stake.

Of course, this would have a lot of implications, some good, some bad:

- People would stake just to keep their coins from disappearing.
- Cold wallets wouldn't really be a thing.
- You probably wouldn't need transaction fees.
- Coins won't get lost in wallets whose privkeys are unknown.
- …

[blackhawk101]

INTEREST?  PPFFTT

ONLY CARE BOUNTY

[J1mb0]

Here's a crazy idea I had a while back:

Think of a coin with fixed supply, but inactivity is punished: Every X number of blocks, a wallet that hasn't been active in some way (i.e. mentioned on the blockchainfor in one of those blocks, either by transactions or staking) loses a small percentage of it's holdings, until a certain minimum amount of dust is reached, which vanishes after the next X blocks, leaving the wallet empty. The amount lost will be paid out to those who stake.

Of course, this would have a lot of implications, some good, some bad:

- People would stake just to keep their coins from disappearing.
- Cold wallets wouldn't really be a thing.
- You probably wouldn't need transaction fees.
- Coins won't get lost in wallets whose privkeys are unknown.
- …

Cold wallets could lease unspendable balance to an on-line wallet - this would improve security of the network without disadvantaging folk who genuinely need to keep large balances off-line for obvious reasons. You could limit the lease period to 30 or 60 days to stop the coins being left on a dvd+r and ensure the owner 'engaged with the network' periodically. You could also make the lease a 'one to one' deal - ie The hot wallet with public key A can only stake leased coins from one cold wallet with public address B.

[ttookk]

Here's a crazy idea I had a while back:

Think of a coin with fixed supply, but inactivity is punished: Every X number of blocks, a wallet that hasn't been active in some way (i.e. mentioned on the blockchainfor in one of those blocks, either by transactions or staking) loses a small percentage of it's holdings, until a certain minimum amount of dust is reached, which vanishes after the next X blocks, leaving the wallet empty. The amount lost will be paid out to those who stake.

Of course, this would have a lot of implications, some good, some bad:

- People would stake just to keep their coins from disappearing.
- Cold wallets wouldn't really be a thing.
- You probably wouldn't need transaction fees.
- Coins won't get lost in wallets whose privkeys are unknown.
- …

Cold wallets could lease unspendable balance to an on-line wallet - this would improve security of the network without disadvantaging folk who genuinely need to keep large balances off-line for obvious reasons. You could limit the lease period to 30 or 60 days to stop the coins being left on a dvd+r and ensure the owner 'engaged with the network' periodically. You could also make the lease a 'one to one' deal - ie The hot wallet with public key A can only stake leased coins from one cold wallet with public address B.

Yeah, I was thinking about some way to implement a certain class of addresses, where you could circumvent the not-having-a-good-long-term-holding-solution. But if you make that too easy, everybody is going to use just that and won't bother with the "normal", money-losing kind.

Your idea isn't a bad solution to that issue. Other solutions could be a ticket-style approach like Decred or Hodl-coin(or whatever its name was), where you lock up your funds for a period of time.

Big holders would probably set up a system in which dust amounts are sent to their cold wallets to keep them active, so finding an alternate solution seems pretty important.

A big problem this coin would have to deal with would be its massive overhead: You would have to check a big part of the blockchain for inactive addresses, then perform transactions on them. This alone could probably fill up transaction limits, if not implemented the right way.

[TillKoeln]

you should Keep in mind that PoS was designed to secure the blockchain and confirm Transaction
as some Kind of energy efficience method ...  compared to Mining via PoW.

and not for generating coins or giving x% interest per year as Marketing idea.

[ttookk]

you should Keep in mind that PoS was designed to secure the blockchain and confirm Transaction
as some Kind of energy efficience method ...  compared to Mining via PoW.

and not for generating coins or giving x% interest per year as Marketing idea.

You are right and this is a big problem with PoS-coins:

- If the interest rate is too low, people will go to some other coin, where it is higher.
- If it's too high, the coin will die at some point.

Finding the sweet spot seems like an almost impossible task. Here's a crazy idea: what would happen, if users could vote on interest rate regularly, let's say, quarterly? You take all numbers proposed and find the median. Some will state crazy high rates, others zero, hopefully, a lot of people would be sensible enough to realize that choosing the right amount secures the future of their coin, so maybe, it would be a way to apply "collective wisdom" (I'm not necessarily a big fan of that concept in general) to this problem.

[Cryptotraider16]

There is great coin with solo pos 10-20%!
http://www.leocoin.org/WhatisProofofStake.aspx

https://coinmarketcap.com/currencies/leocoin/#markets

I hold 100k so i got approx 55 LEOcoin a day and keep sale! I buy them atv0.06$ and 0.10$!

Leocoin is a rich get richer coin,
LEOcoin Balance    Approximate annual percentage reward
0 - 999.9999              0%
1,000 - 4,999.9999    10%
5,000 - 49,999.9999    15%
50,000+                    20%

This discussion is about staking incentives for coins with ultra low interest rates.

 

Yeah,can you imagine for exchanges how happy they are since if they hold at least 50k in cold storage they can stake every single coin that is on his exchange and receive 20% LOL this is crazy.
exchnages that not add LEOcoin are most stupid exchanges if you ask me,but ok,they think they are smart but they are not!

[AeonFlux]

you should Keep in mind that PoS was designed to secure the blockchain and confirm Transaction
as some Kind of energy efficience method ...  compared to Mining via PoW.

and not for generating coins or giving x% interest per year as Marketing idea.

You are right and this is a big problem with PoS-coins:

- If the interest rate is too low, people will go to some other coin, where it is higher.
- If it's too high, the coin will die at some point.

Finding the sweet spot seems like an almost impossible task. Here's a crazy idea: what would happen, if users could vote on interest rate regularly, let's say, quarterly? You take all numbers proposed and find the median. Some will state crazy high rates, others zero, hopefully, a lot of people would be sensible enough to realize that choosing the right amount secures the future of their coin, so maybe, it would be a way to apply "collective wisdom" (I'm not necessarily a big fan of that concept in general) to this problem.

I think users are too stupid to make good decision. Having votes is ok but people are very bad at making decisions that serve their long term interest (look at election!)

[Cryptotraider16]

you should Keep in mind that PoS was designed to secure the blockchain and confirm Transaction
as some Kind of energy efficience method ...  compared to Mining via PoW.

and not for generating coins or giving x% interest per year as Marketing idea.

You are right and this is a big problem with PoS-coins:

- If the interest rate is too low, people will go to some other coin, where it is higher.
- If it's too high, the coin will die at some point.

Finding the sweet spot seems like an almost impossible task. Here's a crazy idea: what would happen, if users could vote on interest rate regularly, let's say, quarterly? You take all numbers proposed and find the median. Some will state crazy high rates, others zero, hopefully, a lot of people would be sensible enough to realize that choosing the right amount secures the future of their coin, so maybe, it would be a way to apply "collective wisdom" (I'm not necessarily a big fan of that concept in general) to this problem.

I think users are too stupid to make good decision. Having votes is ok but people are very bad at making decisions that serve their long term interest (look at election!)

YES! you are right here.

[ttookk]

you should Keep in mind that PoS was designed to secure the blockchain and confirm Transaction
as some Kind of energy efficience method ...  compared to Mining via PoW.

and not for generating coins or giving x% interest per year as Marketing idea.

You are right and this is a big problem with PoS-coins:

- If the interest rate is too low, people will go to some other coin, where it is higher.
- If it's too high, the coin will die at some point.

Finding the sweet spot seems like an almost impossible task. Here's a crazy idea: what would happen, if users could vote on interest rate regularly, let's say, quarterly? You take all numbers proposed and find the median. Some will state crazy high rates, others zero, hopefully, a lot of people would be sensible enough to realize that choosing the right amount secures the future of their coin, so maybe, it would be a way to apply "collective wisdom" (I'm not necessarily a big fan of that concept in general) to this problem.

I think users are too stupid to make good decision. Having votes is ok but people are very bad at making decisions that serve their long term interest (look at election!)

There are studies implying, that the more proficient someone views themselves and less proficient they see others in a given technique, the less proficient they usually are. I'm not quite sure whether this is necessarily applicable to intelligence as well. Let's see if we can find out

Seriously, though, the concept of collective intelligence is, that a single person may be wrong, but a group usually isn't, especially in a field, that doesn't really have to do with knowledge, but for example with finding a given number. I've read somewhere about an example being the "how many beads in a jar" question, where participants are supposed to guess how many beads a glass jar contains. Interestingly enough, if you take as many guesses as possible, the individuals are mostly wrong, but the median is extremely close to the real number.

I think we have a similar case here for a few reasons. One of them is, that there is no "optimal" number, because every number falls victim to a conflict of interests. Plus, while you can exclude really high interest rates, optimal inflation is not a physical constant. The system itself can adapt to it.

The question whether or not you want few experts to decide on a number or the collective is almost a philosophical question, until you apply it: once you create a coin, that has votable interest rates, users will vote on whether they like this idea or not by adapting the coin or not. This in itself is pretty much an application of collective intelligence
Coincidentally, this is actually happening all the time.

[Ayers]

i think you have a good idea here because with such a low interest people are more forced to buy insted of hoarding on their interest, and this will make the price stronger and the coin not die after few months from the launch

[Cryptotraider16]

i think you have a good idea here because with such a low interest people are more forced to buy insted of hoarding on their interest, and this will make the price stronger and the coin not die after few months from the launch

Yeah you are right here!
For excample that altcoin LEOcoin lounch 2014 and now live almost 3 years and community keep rise!
Guys keep attack and say scam but community is bigger and bigger and 1 year ago 2 exchanges trade it now 8-9 trade this coin!
Now when they fork coin 01.07. 2016 on solo pos from pow/pos then community is evdn bigger and coin value keep slow rise!
In 2017 some new dev stuff will happen with that coin!
But i like coin becouse pos,big community and know founders that are supported by uk and usa goverment 👍🏼