Proof of Stake with an Ultra Low Interest Rate

[kiklo]

Why would you need any kind of PoS reward (other than transaction fees) really? Couldn't you keep a PoS blockchain running with transaction fees alone? Maybe have an ultra high interest phase at the beginning for initial distribution.

This would mean, that less people would stake, because there wouldn't be a lot to gain from it. This is counterproductive in decentralization terms, but if, let's say, a high two digit number can still stake with profit, we can assume that the network is going to be safe.

I think focusing on the transactions fees , may be the solution.

After the coin is rolled out, the client's wallet , has a variable flag set with either 0 , 1, 2, 3, 4, 5, 6, 7

Every 24 hours, that staking has been turned off , that # increases by 1.

Wallet comes online , once online , 2 conditions have to be met 
1st Condition Wallet has to be in Sync
2nd Condition Wallet has to be in Staking mode

If both conditions are met , then for every hour the wallet is synced & staking , the variable flag subtracts 1 until it reach 0.

If you are at 0 , then you can send coins without any transaction fees,
If you are at 1, then you can send coins at 1X the transaction fees.
If you are at 2, then you can send coins at 2X the transaction fees.
If you are at 3, then you can send coins at 3X the transaction fees.
If you are at 4, then you can send coins at 4X the transaction fees.
If you are at 5, then you can send coins at 5X the transaction fees.
If you are at 6, then you can send coins at 6X the transaction fees.
If you are at 7, then you can send coins at 7X the transaction fees.

So if you have been offline for 7 Days, you have to be online for 7 hours to avoid the higher transaction fees.
It is also an incentive for People to Want Exchanges to stake, so their withdrawal fees are lower.

Anyone see any problems with this model?

 

[presstab]

That is why change addresses are used, at least on of the reasons why. And yes it would if it accumulates lots of transactions. Not sure what you aren't understanding here, for this particular attack, the more tx on an address the more susceptible. Its that simple. Absolutely nothing complicated about it. Some of my staking wallets have upwards of 50k tx's. I have seen staking wallets with over 100k. This is one of the fundamental problems about how lots of us manage our wallets.

That being said, this is not an attack that is really possible with today's computation.

Never said it was hard to understand, just wanted the point made it ,
that either PoW or PoS can be affected, as it is number of transactions and not a direct staking only issue.
And you helped me accomplish that. 

Like you, I don't really see it being a problem for the foreseeable future.

 

Yes exactly. It is not at all related to PoS. It is related to how us stakers handle our staking

[funkenstein]

Take a look at NXT.

Proof of stake with no interest. 

The trouble here is that 1) you need 100% premine, distributed to your phriends 
and 2)  there is no incentive to mine

You would think that condition 2) would mean your coin is DOA, however -- look at NXT. 
There is some incentive to mine - for the phriends. 

This is called centralization, you basically have ripple here. 

You have a centralized token system.  At least the supply is public, so it's still a huge step up from the pure fraud which is charitably referred to as fiat. 

[kiklo]

Take a look at NXT.

Proof of stake with no interest.  

The trouble here is that 1) you need 100% premine, distributed to your phriends  
and 2)  there is no incentive to mine

You would think that condition 2) would mean your coin is DOA, however -- look at NXT.  
There is some incentive to mine - for the phriends.  

This is called centralization, you basically have ripple here.  

You have a centralized token system.  At least the supply is public, so it's still a huge step up from the pure fraud which is charitably referred to as fiat.  

Actually I have looked at Nxt , and I don't care for it, too much centralization for my tastes.
They are trying to be a platform to add value, I just want to create a coin that is stable and let others create a platform around it , not have it be the platform itself.

Their price has done nothing but drop, no floor in sight.
Nxt does not have that potential. It is merely a Pump & Sale with no end in sight to its drop.
I am designing one that it will never be able to drop below 1 penny.  
It is going to do to BTC, what BTC has been doing to the alts.  Weapon of Choice will be Ultra Low inflation.


 

[ttookk]

Why would you need any kind of PoS reward (other than transaction fees) really? Couldn't you keep a PoS blockchain running with transaction fees alone? Maybe have an ultra high interest phase at the beginning for initial distribution.

This would mean, that less people would stake, because there wouldn't be a lot to gain from it. This is counterproductive in decentralization terms, but if, let's say, a high two digit number can still stake with profit, we can assume that the network is going to be safe.

I think focusing on the transactions fees , may be the solution.

After the coin is rolled out, the client's wallet , has a variable flag set with either 0 , 1, 2, 3, 4, 5, 6, 7

Every 24 hours, that staking has been turned off , that # increases by 1.

Wallet comes online , once online , 2 conditions have to be met 
1st Condition Wallet has to be in Sync
2nd Condition Wallet has to be in Staking mode

If both conditions are met , then for every hour the wallet is synced & staking , the variable flag subtracts 1 until it reach 0.

If you are at 0 , then you can send coins without any transaction fees,
If you are at 1, then you can send coins at 1X the transaction fees.
If you are at 2, then you can send coins at 2X the transaction fees.
If you are at 3, then you can send coins at 3X the transaction fees.
If you are at 4, then you can send coins at 4X the transaction fees.
If you are at 5, then you can send coins at 5X the transaction fees.
If you are at 6, then you can send coins at 6X the transaction fees.
If you are at 7, then you can send coins at 7X the transaction fees.

So if you have been offline for 7 Days, you have to be online for 7 hours to avoid the higher transaction fees.
It is also an incentive for People to Want Exchanges to stake, so their withdrawal fees are lower.

Anyone see any problems with this model?

 

That feels too random for the average user.

To be honest, I think every way to essentially punish those who don't stake (including my option I mentioned earlier) will prevent Average Joe from using your coin.

You have to keep your target audience in mind. If you want to create a nerds dream, fine, go ahead. If you want to battle Bitcoin, you have to reach people who are not interested in tech and schemes. Everything needs to look crystal clear. People might understand on a rational basis why they have to pay more transaction fees, but emotionally, it will feel random to them and they'll feel treated unfairly.

[kiklo]

That feels too random for the average user.

To be honest, I think every way to essentially punish those who don't stake (including my option I mentioned earlier) will prevent Average Joe from using your coin.

You have to keep your target audience in mind. If you want to create a nerds dream, fine, go ahead. If you want to battle Bitcoin, you have to reach people who are not interested in tech and schemes. Everything needs to look crystal clear. People might understand on a rational basis why they have to pay more transaction fees, but emotionally, it will feel random to them and they'll feel treated unfairly.

Hmm,

I will explain it to them , Like So.

If you stake for 1 hour every day, you never pay a transaction fee.
The longer you go with out staking , the higher the transaction fees.

If they can't grasp that , they have other issues.  

Or

You Stake Daily , You No Pay.
You Don't Stake Daily , You Pay More.  

 

FYI:
Actually the goal is not to punish the people , it is to give them incentive to stake.
Since the 1 hour of  staking time is equal to 1 day of not staking, it seems pretty fair to me.
I prefer it if they all staked and no one paid any fees.

FYI2:
We have to include a line that says Transactions Fee Multiplier with the variable # beside it, and it will need to update itself so they know exactly how long they need to be in stake mode , before they can send at 0 costs. They see 1 , they know it is not safe to send until it says 0.

[J1mb0]

- If the interest rate is too low, people will go to some other coin, where it is higher.

Well, I think there are other factors that exhibit positive feedback - things like ubiquity of valid tender and popularity as a currency AND store of wealth. For example, for most BTC users the effective rate of interest is 0% But we all use it! However in this current time and stage of ALT POS you are right.

- If it's too high, the coin will die at some point.

Indeed! 

[Derek492]

In my opinion I think MINT has the best configuration of balance. 5% PoS reward with only 3% money supply inflation. It's the perfect balance. The sweet spot.

I think don't think  can punish people for not staking frequently, only the richest will be able to stake every hour.
Too low of inflation of the money supply will eventually create fungibility problems. Bitcoin will have this problem if the price goes too high.

[kiklo]

In my opinion I think MINT has the best configuration of balance. 5% PoS reward with only 3% money supply inflation. It's the perfect balance. The sweet spot.

I think don't think  can punish people for not staking frequently, only the richest will be able to stake every hour.
Too low of inflation of the money supply will eventually create fungibility problems. Bitcoin will have this problem if the price goes too high.

I would agree with that , except for one issue.

I watched Mint have over $150,000 pumped into it's market cap and it soared to near 30 satoshis per coin.
Because of it's inflation, it is now ~ 4 satoshi.
5% rate on a coin with ~ 24 billion coins is 1.2 Billion per year.
Let's cut that in ½ to only 600 million new coins generated per year. (2½% inflation)
Meaning 1.64 million new coins generated per day.
Even if no one ever sells even 1 Mint, You still need $50.80 per day or $355.60 per week or $1524 per Month to cover your inflation alone ,
The drop in price from ~30 sat to now ~4 sat, it due to the coin not receiving that input amount on a daily basis.

Sadly Mint and my favorite ZEIT are in the same boat
CPA explained it best, True Value has to be created to match or be higher than inflation, if you want your price to be steady or rise.

Compared to BTC generating less that 2000 coins per day, and Mint generating 1.64 million coins per day.
There is almost no way for your coin to rise verses BTC at such numbers.

We either generate more coins or more value per coin by controlling inflation.
BTC has chosen more value , which is why their price keep increasing.

 

FYI:
In regard to punishing, the users can stake for a few hours and pay no transaction fees,
so it is not punishment, they are working for the coin to help cover its costs.

[funkenstein]

Take a look at NXT.

Proof of stake with no interest.  

The trouble here is that 1) you need 100% premine, distributed to your phriends  
and 2)  there is no incentive to mine

You would think that condition 2) would mean your coin is DOA, however -- look at NXT.  
There is some incentive to mine - for the phriends.  

This is called centralization, you basically have ripple here.  

You have a centralized token system.  At least the supply is public, so it's still a huge step up from the pure fraud which is charitably referred to as fiat.  

Actually I have looked at Nxt , and I don't care for it, too much centralization for my tastes.
They are trying to be a platform to add value, I just want to create a coin that is stable and let others create a platform around it , not have it be the platform itself.

Their price has done nothing but drop, no floor in sight.
Nxt does not have that potential. It is merely a Pump & Sale with no end in sight to its drop.
I am designing one that it will never be able to drop below 1 penny.  
It is going to do to BTC, what BTC has been doing to the alts.  Weapon of Choice will be Ultra Low inflation.


 

Well then tell me, how do you intend to make an incentive for others to mine (proof of stake or whatever)  your coin?  We need new blocks to transact..  and if it's only the original dudes who took a premine, then you have your centralization.  So why would I want to come in and help secure the network? 

[kiklo]

Well then tell me, how do you intend to make an incentive for others to mine (proof of stake or whatever)  your coin?  We need new blocks to transact..  and if it's only the original dudes who took a premine, then you have your centralization.  So why would I want to come in and help secure the network?  

hmm,
maybe because I am going to pay them to stake & protect the network.  
(With any luck within a year or so the price alone , will make people want to stake & protect the network.)

Anyway simple payment it is the final conclusion I have to come too,
the local variable idea changing transaction fee met a snag and requires a centralized system to monitor ,
so unless someone figures out a decentralized way , it is not something I would want.