Mining is something the network needs, don't understate that
I know, I tend to overdrawn illustrations, sorry.
or does sunnykings proof of stake give another out?
I really dislike proof of stake now I have thought about it a bit more.
Basically the rich that can hold the coins will forever compound their money whilst poorer people will never be able to sit on their coins. It might be a solution to proof of work but causes even worse economic problems than Bitcoin does. Yeah new money enters the system, but only enters it into the rich wallets. Eventually in 100 years all new PPC generated will go the rich holders and deflate the value of all the coin the poorer people hold. Its a terrible idea.
If proof of stake was modified so that all coins are always generating the equivalent of 1% a year but instead daily, no ones stash of coins would increase relative to other peoples (like it does now) and the 51% attack issue would still be solved. The only reason Sunny put 30 days wait and also has the coins locked when making stake was because it benefits people that can afford to leave them alone.
Proof of stake could be the future because a 51% attack requires buying half the coins, but it would have to be implemented different to PPC, all coins always generate stake equivalent to a magic amount (1% per annum maybe) and the coins do not get taken away during the minting process, so all members of the network can use their coins day to day and generate stake.
PPC is inequality at its worse, the very foundation of the system benefits the early adopters even worse than Bitcoin does.
Well, the general Idea is IMO quite good.
In Order to find Proof of Stake Coins you have to provide the Network with anything it needs.
You have to run a well connected Node, to minimize Orphans, so you maintain the network and help "lite" Nodes. You also have to store a full version of the Block chain.
In addition you secure the Network. A 1% inflation per Year would be IMO acceptable for all this.
The point that makes this a no-go in my eyes is the point that in order to participate you already need to have a large amount of coins.
This leads to two mayor problems, 1. new users don't have a incentive to run a full node and maintain the network (think in 20 Years, Terrra- Petabyte Blockchain and High Speed Connection required --> Running a Full Node becomes a business).
Due to compound interest rates, the rich get richer and get an always bigger share of the Networks security.
This 2 points together would lead to that the Network tends to get more and more centralized until the point where only a few coin rich remain, that have no competition and due to the coin requirement there is no way to challenge them.
Proof of Work is a lot better here, as I see no way where a big miner could build up entry barriers for other miners. As soon as Mining becomes too profitable new competition will enter the marked, maintaining decentralization.
This new inflow is disencouraged with Proof of Stake. If this could be fixed somehow it would be IMO be a good alternative.
