[XPM] Why Primecoin is Useless, Doomed to Fail?

[rocks]

As someone new to Primecoin, it seems that it was created to be only beneficial to early miners in the first month, with little profit or incentive for future miners.

In the first two weeks of Primecoin's life, over 100,000 coins were generated a day while difficulty was around 7. This means that it was both relatively easy to find blocks and blocks were highly valuable.

http://cryptometer.org/primecoin_90_day_charts.html

In just one month the number of coins generated per day has fallen to ~10K and at the same time it is much more difficult to find a block due to increased difficulty. Which means that the amount of coins received per work falls exponentially since it is both harder to find a block and blocks yield fewer coins.

With GPU mining about to come out soon, the difficulty will rapidly rise and we can expect only ~1K or less coins to be generated per day. This is an insignificant amount compared to the first two weeks.

What this means is that those that got in early (first 1-2 weeks) will have generated most of the coins for themselves, leaving little incentive or room for profit for those not involved in the launch.

I was pretty interested in participating in Primecoin when I first saw it recently, but after exploring more it seems to be designed to overly reward those that launched it with little benefit for anyone else. To me those are not traits for a successful alt coin.

[vinne81]

My eyes burn just looking at the stupidity in this thread.

Nice arguments you got there 

[Sunny King]

My pick is always the more realistic scarcity model, like that of Decrits or eMunie for example, where supply adjusts to demand proportionately, not inversely proportionate like that of Primecoin.

If that were the case, you should be denouncing bitcoin and gold rather than making claims that how primecoin's scarcity is inferior to bitcoin.

Your argument of Primecoin being scarce is only true based on the assumption that demand for Primecoin is on a constant linear increase. And as we have seen so far, this is not the case, because I have been observing demand for it closely since the begining.

There is no such assumption, the scarcity is based on Moore's Law, the fact that difficulty and mint rate change with demand is just incidental and temporary effect, which has no bearing on the long term scarcity model.

[Sunny King]

With GPU mining about to come out soon, the difficulty will rapidly rise and we can expect only ~1K or less coins to be generated per day. This is an insignificant amount compared to the first two weeks.

Your math is wrong. Primecoin mint rate reduction is quite slow you won't see daily production drop below 10K any time soon (diff 12 = 10K daily production, a couple thousand times more difficult than the current difficulty 9.75).

Primecoin is designed to sustain a prosperous mining market long term, yet still have stronger scarcity in the short term (first 4 years) than bitcoin's design. These are conscious design choices. The release was pre-announced 10 days in advance, to ensure no advantage to anyone and a fair initial participation.

[Lauda]

My eyes burn just looking at the stupidity in this thread.

Nice arguments you got there 

That 1 sentance beats almosts everything in this thread 

[drummerjdb666]

My eyes burn just looking at the stupidity in this thread.

+1

ecoin OBVIOUSLY wants a lot more XPM for himself!   Greedy sum bitch!   The only point of this thread is to try and drive price down.  OP is wrong! 

[rocks]

With GPU mining about to come out soon, the difficulty will rapidly rise and we can expect only ~1K or less coins to be generated per day. This is an insignificant amount compared to the first two weeks.

Your math is wrong. Primecoin mint rate reduction is quite slow you won't see daily production drop below 10K any time soon (diff 12 = 10K daily production, a couple thousand times more difficult than the current difficulty 9.75).

Primecoin is designed to sustain a prosperous mining market long term, yet still have stronger scarcity in the short term (first 4 years) than bitcoin's design. These are conscious design choices. The release was pre-announced 10 days in advance, to ensure no advantage to anyone and a fair initial participation.

I think you are deluding yourself, my math above may not be exact, but it is representative. The coin was designed so that those that mined in the early few weeks would capture the vast majority of coins mined, leaving both little opportunity or incentive for others to join later and participate.

Your argument is everyone was free to participate in those first few weeks does not matter, those that did not (who are most people) now have little incentive to join and care about primecoin.

[bcp19]

With GPU mining about to come out soon, the difficulty will rapidly rise and we can expect only ~1K or less coins to be generated per day. This is an insignificant amount compared to the first two weeks.

Your math is wrong. Primecoin mint rate reduction is quite slow you won't see daily production drop below 10K any time soon (diff 12 = 10K daily production, a couple thousand times more difficult than the current difficulty 9.75).

Primecoin is designed to sustain a prosperous mining market long term, yet still have stronger scarcity in the short term (first 4 years) than bitcoin's design. These are conscious design choices. The release was pre-announced 10 days in advance, to ensure no advantage to anyone and a fair initial participation.

I think you are deluding yourself, my math above may not be exact, but it is representative. The coin was designed so that those that mined in the early few weeks would capture the vast majority of coins mined, leaving both little opportunity or incentive for others to join later and participate.

Your argument is everyone was free to participate in those first few weeks does not matter, those that did not (who are most people) now have little incentive to join and care about primecoin.

Then it's time to say "goodbye troll".

Shut up and leave us to our mining. 

[Dumbo]

I think you are deluding yourself, my math above may not be exact, but it is representative. The coin was designed so that those that mined in the early few weeks would capture the vast majority of coins mined, leaving both little opportunity or incentive for others to join later and participate.

Your argument is everyone was free to participate in those first few weeks does not matter, those that did not (who are most people) now have little incentive to join and care about primecoin.

I started mining less than a week back, and I am making a profit here (however small).  

The problem you seem to have here is that unlike SHA256 and Scrypt based cryptos, there are no specialized GPU miner (yet) and ASICs made for bitcoins do not work in this and that you cannot mine 100s of coins from your laptop. By your argument, the coin is bad just because it is hard to mine does not hold. Similar arguments can be made about bitcoins and Litecoins. Things get harder to mine as time passes by, it's how things work. you just need to make smart choices.

You can buy XPM mining contracts, wait for GPU versions to be rolled out or find a way to rent dedicated servers. I know a few people who are making 1000+ XPMs/day by mining with the right equipment.  It is no different than investing in Bitcoin ASIC rigs.

[ghostlander]

Although Primecoin follows inflationary concept, it produces not so much coins per year. 1 minute block target results in 525600 blocks per year. If the 1st year average difficulty is 11, the coin supply is 4.4 million only. By the way, it has been 40 days after the release and 1.6 million coins been mined already. Nothing wrong there.

Primecoin cannot be 51% attacked easily. It employs advanced checkpointing just like PPCoin, though it's disabled by default currently. May become mandatory at any moment with a simple client update if necessary.

If Avalon didn't sell its mining rigs and chips to the public but instead got private venture capital and mined coins for Avalon itself, it would have easily  been able to take over Bitcoin and all sha256 based cryptocurrecnies by sheer dominant hashing power.

Avalon didn't do it because, by pure luck, its founder happens to have the decentralization ideal. Avalon's 110nm technology is nothing cutting edge. I don't see why can't anyone fund a way cooler, hence more powerful, 40nm ASIC miner in a period of 6-12 months. BTC is a legal currency now. It's a viable business. If the new miners are 3 times more powerful than all Avalons, it can take over ~70% of the hashing power.  The dominant role of BTC sure makes it a lightning rod to attract attackers.

KnC ASICs are at 28nm already. Current Avalons and Erupters are becoming obsolete.

[mhps]

KnC ASICs are at 28nm already. Current Avalons and Erupters are becoming obsolete.

KnC hasn't proved the viability of 28nm. 40nm ASICS chips have been made already by small groups. Most of the members here never heard of them. All that needed to take over 50+% hash power is someone's investment to organize a private operation.

[eCoinomist]

Your argument is everyone was free to participate in those first few weeks does not matter, those that did not (who are most people) now have little incentive to join and care about primecoin.

This is very true, indeed.

PS. Even I, who got involved since launch and probably have mined more than 90% percentile of XPM miners, have no incentive to continue supporting it long term - anyone with real business sense can see clearly the truth behind my OP.

[eCoinomist]

If that were the case, you should be denouncing bitcoin and gold rather than making claims that how primecoin's scarcity is inferior to bitcoin.

As I explained in OP, you don't really have a "scarcity" model to begin with.

Here is what both Bitcoin and Gold have in common, which is legitimately regarded as "scarce" by dictionary definition ("not abundant):
- no matter what the demand for Bitcoin or Gold is, the amount of BTC/Gold is caped and production rate only slows down over time in a long term trend (where no major technology break-though happens.)

Primecoin, however, relies on "projected" increasing demand to keep it "scarce", but when demands drops, there is proportionate "abundance" => this does not justify the definition of "scarce" - "not abundant".

There is no such assumption, the scarcity is based on Moore's Law, the fact that difficulty and mint rate change with demand is just incidental and temporary effect, which has no bearing on the long term scarcity model.

"the scarcity is based on Moore's Law"?
Common, you make me Laugh MAO    

I'm sure someone like you knows better than most trolls in this thread that no (alt)coin scarcity can be based on technical Moore's Law, that's not how it works.

History has proven again and again that human "demand" for insufficient supply (or perception there of) is what creates scarcity, not technical limitation of some mathematical or computer algorithms.

the fact that difficulty and mint rate change with demand is just incidental and temporary effect

Ok, I see that you finally admitted that you did not think through when designing Primecoin's demand/supply system.
Whether that is truly "incidental" or "intentional" - I'll leave to people to judge, based on your PPCoin release history.

[Sunny King]

Just because you couldn't understand how Moore's Law regulates inflation in the long term does not mean it doesn't work.

PPC has already demonstrated that it works very well, via an accelerated schedule due to the introduction of ASIC mining. PPC currently has the lowest inflation rate among all top altcoins. How about a collapse in demand? Let's say PPC price drops to 0.0001, 6% of its current price, how about difficulty then, still gonna be at 60K, inflation rate is only going to double at most, still way less inflation than quite a few altcoins such as FTC. That is exactly as designed, Moore's Law would dominate the scarcity model in the long term, demand only plays secondary role in short term.

The scarcity model is by design and of course intentional. It strengthens scarcity in the first four years than bitcoin's design, meanwhile also gives early adopters/investors reasonable advantage. I am pro free market and do not have a jealousy problem toward them, rather I recognize their important roles to help with the growth of the currency.

What you link is propaganda from CMC people. They copied PPC without giving credit yet spread this propaganda about how PPC and XPM (among several other top altcoins) are unfair. Yet they conveniently forget to mention in their malicious propaganda that both PPC and XPM had about 10 days of pre-release notice so the mining public had fair opportunities to participate. Also, both PPC and XPM have no cap, meaning in the long term the seemingly high initial mint quantity would be constantly diluted unlike other coins with cap scarcity model.

[hathmill]

Just because you couldn't understand how Moore's Law regulates inflation in the long term does not mean it doesn't work.

PPC has already demonstrated that it works very well, via an accelerated schedule due to the introduction of ASIC mining. PPC currently has the lowest inflation rate among all top altcoins. How about a collapse in demand? Let's say PPC price drops to 0.0001, 6% of its current price, how about difficulty then, still gonna be at 60K, inflation rate is only going to double at most, still way less inflation than quite a few altcoins such as FTC. That is exactly as designed, Moore's Law would dominate the scarcity model in the long term, demand only plays secondary role in short term.

The scarcity model is by design and of course intentional. It strengthens scarcity in the first four years than bitcoin's design, meanwhile also gives early adopters/investors reasonable advantage. I am pro free market and do not have a jealousy problem toward them, rather I recognize their important roles to help with the growth of the currency.

What you link is propaganda from CMC people. They copied PPC without giving credit yet spread this propaganda about how PPC and XPM (among several other top altcoins) are unfair. Yet they conveniently forget to mention in their malicious propaganda that both PPC and XPM had about 10 days of pre-release notice so the mining public had fair opportunities to participate. Also, both PPC and XPM have no cap, meaning in the long term the seemingly high initial mint quantity would be constantly diluted unlike other coins with cap scarcity model.

Sunny, if price falls and if miners stops mining because price falls and the supply of coins increases because of falling difficulty (yes a lot of if's and perhaps it will not unfold like this but IF it does happen this way [please humor me]): then do you think that it is possible that new miners will step in to mine these easy/cheap coins - hoping that difficulty and then price will go up later on therefor considering it a bargain thus pressing up the difficulty yet again creating aa self-fullfillinng prophecy?

[smolen]

Sunny, if price falls and if miners stops mining because price falls and the supply of coins increases because of falling difficulty (yes a lot of if's and perhaps it will not unfold like this but IF it does happen this way [please humor me]): then do you think that it is possible that new miners will step in to mine these easy/cheap coins - hoping that difficulty and then price will go up later on therefor considering it a bargain thus pressing up the difficulty yet again creating aa self-fullfillinng prophecy?

I'm sorry for breaking into discussion. If mining reward becomes small and if there will be a way to short sell, new miners will step in to destroy the currency, not to mine it.

[Sunny King]

Sunny, if price falls and if miners stops mining because price falls and the supply of coins increases because of falling difficulty (yes a lot of if's and perhaps it will not unfold like this but IF it does happen this way [please humor me]): then do you think that it is possible that new miners will step in to mine these easy/cheap coins - hoping that difficulty and then price will go up later on therefor considering it a bargain thus pressing up the difficulty yet again creating aa self-fullfillinng prophecy?

There may very well be speculations on miners' side I don't know, but the point is over long term the effect of Moore's Law plus algorithmic/hardware improvements would overwhelm any demand changes anyways. Demand typically fluctuates within 2 orders of magnitude, while Moore's Law + algorithmic/hardware advancement would reach over 5 orders of magnitude or more over long term. For example in bitcoin network, it went through about 4 orders of magnitude within the first five years.

[eCoinomist]

Just because you couldn't understand how Moore's Law regulates inflation in the long term does not mean it doesn't work.

PPC has already demonstrated that it works very well, via an accelerated schedule due to the introduction of ASIC mining. PPC currently has the lowest inflation rate among all top altcoins. How about a collapse in demand? Let's say PPC price drops to 0.0001, 6% of its current price, how about difficulty then, still gonna be at 60K, inflation rate is only going to double at most, still way less inflation than quite a few altcoins such as FTC. That is exactly as designed, Moore's Law would dominate the scarcity model in the long term, demand only plays secondary role in short term.

The scarcity model is by design and of course intentional. It strengthens scarcity in the first four years than bitcoin's design, meanwhile also gives early adopters/investors reasonable advantage. I am pro free market and do not have a jealousy problem toward them, rather I recognize their important roles to help with the growth of the currency.

What you link is propaganda from CMC people. They copied PPC without giving credit yet spread this propaganda about how PPC and XPM (among several other top altcoins) are unfair. Yet they conveniently forget to mention in their malicious propaganda that both PPC and XPM had about 10 days of pre-release notice so the mining public had fair opportunities to participate. Also, both PPC and XPM have no cap, meaning in the long term the seemingly high initial mint quantity would be constantly diluted unlike other coins with cap scarcity model.

Again, I must say that your whole theory relies on steady demand for Bitcoin, PPC and XPM alike.

You have not taken into account disruptive technologies, such as Decrits (which is for pure example only - unlikely to ever realize) or eMunie (still in beta, but close to initial launch) that will take over the whole Bitcoin niche (which to date only has about 200K users, max).

In two years from now, Bitcoin has a very high chance of becoming "history" when it comes to functioning as a currency, and may only be used as a store of value by then (a commodity), because new things like eMunie will be able to process transactions in seconds, not minutes - so while not designed to be a "commodity" - it's function is very clear - to be used as a currency and it suppose to do that better than what Visa has already accomplished.

I'm sure Satoshi was very clear about where he wanted to see Bitcoin going over the long term - to function as a commodity and a stepping stone towards decentralized currency revolution - and that is what eMunie is NOT designed to replace (but who knows, maybe someone else will create something better than Bitcoin in the future to be used as Digital Gold!).


That's why I see no future for Primecoin, nor PPCoin, because you don't seem to have planned out a clear direction of where you want to see your coin heading in the long term.

Both Primecoin and PPcoin are lost in between being a "currency" and a "commodity" - but do a horrible job of both...

[maco]

Just because you couldn't understand how Moore's Law regulates inflation in the long term does not mean it doesn't work.

PPC has already demonstrated that it works very well, via an accelerated schedule due to the introduction of ASIC mining. PPC currently has the lowest inflation rate among all top altcoins. How about a collapse in demand? Let's say PPC price drops to 0.0001, 6% of its current price, how about difficulty then, still gonna be at 60K, inflation rate is only going to double at most, still way less inflation than quite a few altcoins such as FTC. That is exactly as designed, Moore's Law would dominate the scarcity model in the long term, demand only plays secondary role in short term.

The scarcity model is by design and of course intentional. It strengthens scarcity in the first four years than bitcoin's design, meanwhile also gives early adopters/investors reasonable advantage. I am pro free market and do not have a jealousy problem toward them, rather I recognize their important roles to help with the growth of the currency.

What you link is propaganda from CMC people. They copied PPC without giving credit yet spread this propaganda about how PPC and XPM (among several other top altcoins) are unfair. Yet they conveniently forget to mention in their malicious propaganda that both PPC and XPM had about 10 days of pre-release notice so the mining public had fair opportunities to participate. Also, both PPC and XPM have no cap, meaning in the long term the seemingly high initial mint quantity would be constantly diluted unlike other coins with cap scarcity model.

Again, I must say that your whole theory relies on steady demand for Bitcoin, PPC and XPM alike.

You have not taken into account disruptive technologies, such as Decrits (which is for pure example only - unlikely to ever realize) or eMunie (still in beta, but close to initial launch) that will take over the whole Bitcoin niche (which to date only has about 200K users, max).

In two years from now, Bitcoin has a very high chance of becoming "history" when it comes to functioning as a currency, and may only be used as a store of value by then (a commodity), because new things like eMunie will be able to process transactions in seconds, not minutes - so while not designed to be a "commodity" - it's function is very clear - to be used as a currency and it suppose to do that better than what Visa has already accomplished.

I'm sure Satoshi was very clear about where he wanted to see Bitcoin going over the long term - to function as a commodity and a stepping stone towards decentralized currency revolution - and that is what eMunie is NOT designed to replace (but who knows, maybe someone else will create something better than Bitcoin in the future to be used as Digital Gold!).


That's why I see no future for Primecoin, nor PPCoin, because you don't seem to have planned out a clear direction of where you want to see your coin heading in the long term.

Both Primecoin and PPcoin are lost in between being a "currency" and a "commodity" - but do a horrible job of both...

Okay, you stated you do not like it... we understand you do not... can you move along? We get it, you do not care...
if you do not care, stop wasting your time with it. Stop playing business, and do business. Do what you want, and so shall we.

Fair?

[mustyoshi]

Primecoin is useful as more than just a currency though, as said before, hobbyists will still use it even after the pump and dumpers have left.