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creamynebula
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June 11, 2014, 03:10:49 AM |
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I think a more pressing concern regarding the block reward is our PoW algorithm itself, when HIRO launched X11 was a new PoW algorithm, there were no multipools or big farms exploiting it, now its been a while that there are both, so mining income is centralized - and at the hands of people that instantly dump it for quick cash. We need to change algo.
pretty please? |
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coinlighter
Member
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Activity: 118
Merit: 10
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June 11, 2014, 04:47:54 AM |
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It's great! Unfortunately I don't have a twitter account to retweet  Where's your hiro address? I want to sent some hiros your way.  Thank you! |
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OmarGsPools
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June 11, 2014, 05:53:27 AM |
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Block Reward Modification Proposal
The current block reward of 400 HIRO every 60 seconds is set to produce 576,000 HIRO a day. My proposal is to stray from the fixed block reward scheme and have a dynamic block reward dependent on difficulty which would also lead to a dynamic coin supply.
The dynamic block reward scheme would be the inverse of what Darkcoin had implemented. They have a max block reward of 25 and minimum of 5. Their reward decreases with difficulty creating scarcity as the network hashrate increases. The proposal’s new scheme would have our reward increase as difficulty increased and decrease as it fell. This would create scarcity when the network hashrate and difficulty are low. We would do the opposite and have a max block reward of 400 (our original reward) and minimum of 80.
The benefits of a decreasing block reward when difficulty is decreasing is that the supply of HIRO falls when hashrate falls. Network hashrate is a good indicator of coin support and miner interest so we can prevent oversaturating the market with HIRO when overall support for the coin is low. This makes recovering from lows in overall support as we’d be producing at approximate 80 HIRO per block. This would result in 115,200 HIRO produced daily which at the time of writing this would require 0.144 BTC to purchase all HIRO produced daily. This is a tiny number compared to other cryptocurrencies and this gives us an advantage in the stabilization of our price.
The benefits of an increasing block reward as difficulty climbs is that we begin to produce more HIRO to accommodate for the new generated interest. Just like a supplier produces more products when there is more demand we will increase our supply to accommodate. This key point of this feature is to prevent a large cut in our total supply and to prevent market manipulation. As previously stated at 80 HIRO per block, it won’t take much to buy the current day’s production of HIRO. This means that someone could purchase several day’s worth of HIRO and wreak havoc on the market with swings or “pump and dumps”. The increase block reward allows for more HIRO to be produced to compensate for any large buys as naturally miners will move to the most profitable coin. If a large buy order went through and tripled HIRO’s value, miners would flock to mine HIRO and increase the network difficulty and bring more HIRO into the market. They would then sell their HIRO to bridge the supply and demand gap. In the case that they sell so much HIRO that we are back to our original price or below, they will most likely leave to mine another coin. This would drop our network difficulty and block reward and make it easy to prevent any further dumping. This would also make it easier to move to a higher price level as the HIRO entering the market would drop also.
In basic economic terms we would be cutting the supply when demand is low to maintain the same price and increasing the supply when demand is high to maintain the same price. This would give us an inherit defensive mechanism in price stabilization.
A more refined proposal will be written with graphs, game theory, figures and numerical examples.
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fedmahnkassad
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June 11, 2014, 07:12:41 AM |
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Block Reward Modification Proposal
The current block reward of 400 HIRO every 60 seconds is set to produce 576,000 HIRO a day. My proposal is to stray from the fixed block reward scheme and have a dynamic block reward dependent on difficulty which would also lead to a dynamic coin supply.
The dynamic block reward scheme would be the inverse of what Darkcoin had implemented. They have a max block reward of 25 and minimum of 5. Their reward decreases with difficulty creating scarcity as the network hashrate increases. The proposal’s new scheme would have our reward increase as difficulty increased and decrease as it fell. This would create scarcity when the network hashrate and difficulty are low. We would do the opposite and have a max block reward of 400 (our original reward) and minimum of 80.
The benefits of a decreasing block reward when difficulty is decreasing is that the supply of HIRO falls when hashrate falls. Network hashrate is a good indicator of coin support and miner interest so we can prevent oversaturating the market with HIRO when overall support for the coin is low. This makes recovering from lows in overall support as we’d be producing at approximate 80 HIRO per block. This would result in 115,200 HIRO produced daily which at the time of writing this would require 0.144 BTC to purchase all HIRO produced daily. This is a tiny number compared to other cryptocurrencies and this gives us an advantage in the stabilization of our price.
The benefits of an increasing block reward as difficulty climbs is that we begin to produce more HIRO to accommodate for the new generated interest. Just like a supplier produces more products when there is more demand we will increase our supply to accommodate. This key point of this feature is to prevent a large cut in our total supply and to prevent market manipulation. As previously stated at 80 HIRO per block, it won’t take much to buy the current day’s production of HIRO. This means that someone could purchase several day’s worth of HIRO and wreak havoc on the market with swings or “pump and dumps”. The increase block reward allows for more HIRO to be produced to compensate for any large buys as naturally miners will move to the most profitable coin. If a large buy order went through and tripled HIRO’s value, miners would flock to mine HIRO and increase the network difficulty and bring more HIRO into the market. They would then sell their HIRO to bridge the supply and demand gap. In the case that they sell so much HIRO that we are back to our original price or below, they will most likely leave to mine another coin. This would drop our network difficulty and block reward and make it easy to prevent any further dumping. This would also make it easier to move to a higher price level as the HIRO entering the market would drop also.
In basic economic terms we would be cutting the supply when demand is low to maintain the same price and increasing the supply when demand is high to maintain the same price. This would give us an inherit defensive mechanism in price stabilization.
A more refined proposal will be written with graphs, game theory, figures and numerical examples.
In general I find the idea interesting and do believe it will have a positive effect on the price. There are a few things that need to be considered though and please excuse me if they have been already (I am an economist myself and not a developer). I will just point them out below: 1. This model can result in rapid swings in network hash-rate and an difficulty. I am not sure how Hiro is handling this at the moment but we need to be sure that this will not result in slower block times. 2. It will be very important what would be set as the lowest hashrate for the 80 reward and what would be set as the highest for 400, because if these are not pinned down precisely then we could easily have the network sitting on just 80 or just 400. Also it needs to be considered that with mining equipment and mining software developing, what is a high hash rate at the moment might not be a high hash rate in just a few months from now. So the absolute maximum block reward should be set to something extremely high given the current landscape. 3. A lot of people look at the maximum coin supply and the supply curve when evaluating a coin and with the proposed changes it will be very hard for the average person to make a good estimation of what supply is to be expected. This might have an effect on the price where the coin is still priced at the maximum possible supply while in reality it is going to be much harder to obtain. All in all it's something that has not been done before and should generate a lot if interest in the coin, which can be used to further increase awareness and attract more people to the community. That said, we still need that one elusive feature that will grab people's imagination and will make them buy and hold Hiro like there is no tomorrow. |
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equalizer
Member
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Activity: 118
Merit: 10
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June 11, 2014, 08:47:35 AM |
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I am neither an economist nor a developer so apologies in advance if this question is remedial.
If the rewards increase as the difficulty increases, wouldn't that attract more multipools to mine hiro at a rate no individual miner can get anywhere near, and proceed to dump them for prices below what an individual miner can sell their hirocoins for?
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cryptodevil
Legendary
Offline
Activity: 2170
Merit: 1240
Thread-puller extraordinaire
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June 11, 2014, 08:57:00 AM |
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Ok, here's a suggestion. Increase the block reward as the diff increases, but also increase the time to maturity for those coins or, going along those same lines, have the individual coins in each block reward given increasing maturity times, so they cannot all be dumped on exchanges as soon as they are mined.
Just thinking out loud.
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WARNING!!! Check your forum URLs carefully and avoid links to phishing sites like 'thebitcointalk' 'bitcointalk.to' and 'BitcointaLLk' |
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maxsinner
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June 11, 2014, 11:42:11 AM |
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We are fine as long as Mintpal does not delist us. People go to Bittrex mainly in search for the newest P&D coin. |
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tempestb
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June 11, 2014, 03:12:44 PM |
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Creating more coins as the difficulty goes up will benefit miners, but it doesn't benefit the coin's value if you are increasing supply of the coins. Look at DarkCoin, it restricted supply by cutting the number of generated coins over the lifetime, and created Masternodes to absorb many of the current coins. That shot the price way up.
Consider tying transaction fees to held coins. For every coin I hold, I get some portion of the transaction fees. This would give an incentive to hold coins, making them more scarce and increasing their value.
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1D7JwRnoungL1YQy7sJMsqmA8BHkPcKGDJ
We mine as we dream... Alone
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OmarGsPools
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June 11, 2014, 04:34:02 PM |
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Ok, here's a suggestion. Increase the block reward as the diff increases, but also increase the time to maturity for those coins or, going along those same lines, have the individual coins in each block reward given increasing maturity times, so they cannot all be dumped on exchanges as soon as they are mined.
Just thinking out loud.
The thing is they'd only bring us closer to our 400 HIRO block reward which is exactly where we are now. Assuming these multipools bring large hashrates to the network we'd be at a higher difficulty then we are now producing 400 HIRO which would make us not too profitable at this point to mine and discourage Multipools. Creating more coins as the difficulty goes up will benefit miners, but it doesn't benefit the coin's value if you are increasing supply of the coins. Look at DarkCoin, it restricted supply by cutting the number of generated coins over the lifetime, and created Masternodes to absorb many of the current coins. That shot the price way up.
Consider tying transaction fees to held coins. For every coin I hold, I get some portion of the transaction fees. This would give an incentive to hold coins, making them more scarce and increasing their value.
The goal was necessarily to just cut the supply to create more value for each coin. The idea was to create a defensive mechanism for HIRO by cutting supply when demand is low to keep the same price. |
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Acidyo
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June 11, 2014, 04:36:27 PM |
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We are fine as long as Mintpal does not delist us. People go to Bittrex mainly in search for the newest P&D coin. This is actually the case with many coins.  |
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tempestb
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June 11, 2014, 05:42:26 PM |
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The goal was necessarily to just cut the supply to create more value for each coin. The idea was to create a defensive mechanism for HIRO by cutting supply when demand is low to keep the same price.
I see. But it makes mining less attractive as the difficulty goes up. So as already mentioned, it favors large groups and you end up with a 51% or worse. I've said it before, but the only reason people will invest in a coin is if it has some practical value to them over the other choices. This coin does not distinguish itself from the others in a way that is meaningful for anyone. A different algo, but this means nothing to the consumer of the coin. Maybe come up with a better way to do anonymous transactions. Right now you either have the method that makes the blockchain huge, or you have the Masternode idea. But I am thinking masternodes will run afoul of the SEC. If you are taking money to operate a system that exchanges currency, you are going to be considered a money-transmitter and FinCen is going to go shut you down. Masternodes will eventually fail once attention is brought to DRK (And any other coin using it) if they continue with this bad idea. Someone needs to come up with an algo that supports anonymous transactions by design, and not by having cash exchangers (masternodes) and not blowing up the block chain. Get that, and then you become the #2 coin. Maybe eventually #1. |
1D7JwRnoungL1YQy7sJMsqmA8BHkPcKGDJ
We mine as we dream... Alone
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OmarGsPools
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June 11, 2014, 07:05:17 PM
Last edit: June 11, 2014, 07:24:00 PM by OmarGsPools |
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  The graphs are more of a snapshot at a specific time, so lets say next block difficulty drops because of a price drop or dumping then supply which was constant at that block for 400 would drop to 380. Situation: Hashrate Maniuplation Miners/Multipools would mine HIRO for max rewards and then pull hashrate to create scarcity. They would then sell their HIRO at a premium due the increased scarcity and cause the price to fall through increased supply in the market. This would then lead to a decrease in difficulty as miners have left the network and price has fallen, making HIRO unprofitable to mine. Supply of HIRO is decreased to prevent any further market oversaturation and would require very little to maintain the current price. Situation: Fallen Demand Price drops and HIRO becomes unprofitable to mine and causes difficulty to drop. Supply of HIRO is decreased to prevent any further market oversaturation and would require very little to maintain the current price. |
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tempestb
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June 11, 2014, 07:15:27 PM |
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Did you draw those charts? You should go outside and get some fresh air. You've spent too much time on this.
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1D7JwRnoungL1YQy7sJMsqmA8BHkPcKGDJ
We mine as we dream... Alone
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n00bnoxious
Sr. Member
Offline
Activity: 280
Merit: 250
Bitnation Development Team Member
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June 11, 2014, 07:16:27 PM |
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Someone needs to come up with an algo that supports anonymous transactions by design, and not by having cash exchangers (masternodes) and not blowing up the block chain. Get that, and then you become the #2 coin. Maybe eventually #1.
This has been done, BUT it's only at the conceptual stage; it's called Proof of Blockchain. I tried to get my head around how it provides anonymity briefly but it seems incredibly complex. |
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OmarGsPools
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June 11, 2014, 07:27:21 PM |
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Did you draw those charts? You should go outside and get some fresh air. You've spent too much time on this.
Heading off to work in a bit so that'll be my break. If there are any flaws or possible situations for manipulation that the model can't handle please let me know. |
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Joerii
Legendary
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Activity: 1274
Merit: 1050
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June 12, 2014, 12:10:56 AM |
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Love it ! We should quote this on every page, and get this on social media. I saw Dogecoin already RT'd it, they have 7.5k followers.... I also retweeted it, and suggest everyone here to do the same. |
Hypercube - get the attention you deserve
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ClutchThese
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June 12, 2014, 12:33:02 AM |
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Love it ! We should quote this on every page, and get this on social media. I saw Dogecoin already RT'd it, they have 7.5k followers.... I also retweeted it, and suggest everyone here to do the same. Ugh, it's been removed?! Anyone else have it? i'd like to see what it was. |
Signature for Rent - PM if Interested
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Altcoin Agent
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June 12, 2014, 12:42:49 AM
Last edit: June 12, 2014, 12:53:17 AM by Altcoin Agent |
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Love it ! We should quote this on every page, and get this on social media. I saw Dogecoin already RT'd it, they have 7.5k followers.... I also retweeted it, and suggest everyone here to do the same. Ugh, it's been removed?! Anyone else have it? i'd like to see what it was. Ooopsy, I had to mess with it because of a small error in the render, but forgot to update this thread ! https://www.youtube.com/watch?v=UEKejlwE-FoHere's the link to the tweet. https://twitter.com/altcoinagent/status/476588686965235713 |
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