# First things firstThe recent hard fork gathered lots of attention and excitement and people are jumping into the currency with both feet. It needs a few months to settle out.
Patience.Twitter @coin_magi_xmg posted a couple weeks ago about a
big announcement scheduled for 1 Feb. That will have some effect on popularity and is likely to again disrupt mining activity and rewards.
Patience.Consider that exchanges dislike frequent hard forks. They're maintaining wallets for hundreds of coins, database servers, thousands of user accounts, fail-over and backup systems. They're busy. Don't make them do more wallet maintenance than needed. Every wallet upgrade requires testing prior to implementation live on their system. It has to function correctly with the user database, trade scripts, web front-end, etc.
It's a little easier for mining pools but they, too, have an expectation that their wallets are stable and their stratum gateways, account databases, and web front-ends all function nicely together. For big multi-pools, upgrading one wallet potentially breaks the whole pool.
Patience.Any change to how the network deals with mining is going to require a hard fork and, as we've seen this month, hard forks can be messy and time-consuming and can even introduce bugs which break the network.
HODL. Wait. Watch. Patience.Let things settle down for three to six months.
# Assumptions1. Purpose/Function of MagiReward-PoS is to encourage HODLers:
a. to keep wallets (hereafter: nodes) on the network in order to prevent centralization
b. to provide a level of inflation (increase number of total XMG)
2. Purpose/Function of MagiRewards-PoW is to encourage miners:
a. to secure the network against double-spend and other attacks by transaction verification
b. to provide a level of inflation (increase number of total XMG)
4. No provision for Proof of Burn or other security measures
# Current SituationNearly 1/3 (!!!) of all nodes on the network are maintained by crypto-currency exchange services (10-20) and "public" mining pools (30-50.) [Numbers are guestimates assuming need for load-balancing and maximum up-time (fail-over security.)]
__Proof of Stake__1. By keeping open nodes on the network, the network remains a Network rather than a single centralized processing center.
2. Individuals are encouraged to keep an open node on the network through MagiReward-PoS. To wit, each node participates in a lottery whose reward is freshly minted coin in the wallet.
a. Chance of "winning" the lottery for any given block is a function of coin age (how recently it was last transmitted between addresses, the wallet was opened for staking, or minted as a PoS reward), network PoS difficulty (determined ... how?), and the number of coin at stake.
b. actual reward is a different function of same parameters
3. MagiReward-PoS increases the total number of coin available for use.
__Proof of Work__1. "Miners" actively secure the network against a variety of attack vectors by computing cryptographic verification hashes of transactions taking place on the network while competing to "solve" a block-hash.
2. Each transaction has a Fee involved, which is shared by the verifying miners (?? Or is it Burned ??)
3. "Miners" are rewarded for participating in this security by receiving a portion of fees (?) as well as a number of freshly minted coin in inverse proportion to network difficulty.
4. Network difficulty is a function of the number of transactions in the verification cue, the total amount of computational power of miners on the network, and the difficulty of the previous n blocks.
5. Reduction of reward based on network computational power is intended to reduce electrical energy use of the network while preserving the well-proven security function of active computation.
# ProposedThis proposal attempts to solve mining rewards diminishing in the face of growing network and coin popularity AND preserve the spirit of electrically efficient, commodity hardware, mining network.
1. Allow __all__ active nodes, even those with a zero balance, to participate in MagiReward-PoS
a. Serves to increase the total number of network nodes and keep network decentralized.
b. Resources needed to maintain a node are, currently, relatively low. This will only marginally increase total network electrical use.
2. Increase PoS-based inflation to 5% +/- 1.
a. 5% is enough to beat inflation in __most__ national fiat currencies. 2% +/- 1 does not.
b. may also be enough to compensate for electrical energy use to keep node open and active; stake-weight dependant
3. Add parameters {
qty_nodes} and {
local_hashes_at_node} to MagiReward system such that the number of nodes on the network increase total inflation and hash rate on a single node reduces mining related inflation at __that__ node.
a.
PoS_reward = qty_nodes * pos_diff * stake_weight b.
PoW_reward = ((net_hashes / (qty_nodes * pow_diff)) / local_hashes_at_node) + tx_fees i.
pow_diff is a function which grows in proportion to
net_hashes and shrinks in proportion to
qty_txids ii.
local_hashes_at_node is hash rate of all miners working on the rewarded node
c. or similar ...
This proposal allows total network size, counted in nodes, to participate in the inflation rate. This serves to encourage more nodes on the network which increases decentralization.
1.
local_hashes_at_node discourages large hash rate per node.
a. Severely penalizes botnets and js web-based (CoinHive type) deployments by either
i. reducing reward to near zero if massive hash rate on single node
ii. vastly complicates set-up and maintenance requirements if hashing on multiple nodes
b. Sadly, it also penalizes pooled mining but that can't be helped.
c. On the upside, it encourages all miners to operate at least one node since, by increasing
qty_nodes, rewards go up.
2.
local_hashes_at_node also encourages miners to use low power consumption mining rigs, such as Arduino and other SoC boards.
3. A node consumes one or more cpu cores (and, currently, about 250MB RAM) reducing the number of cores a mining machine can reasonably devote to mining if it self-hosts a node which achieves a, admittedly small, reduction in electrical usage for mining activity.
