The problem is fundamental and will stay long-term, so the solution must be fundamental. I think the only viable option is Proof-of-Stake (PoS), the form of mining when a probability of block generation increases dramatically with increase of coins in the wallet of miner. TO day this technology has already proven itself with a several years of operating in probably a hundred of coins. I know no serious issues reported or acknowledged security concerns.
Moreover, PoS is viable economically, as it reward long-term coin supportes and provide income on capital. Also PoS stimulate people to maintain full nodes which favorably affects network integrity and security.
Still, PoS is not ideal because it give a significant share of block and coin generation to coin bags with large wallets. But it could be adjusted to reduce such factor. For example the network could provide even tiny amount of coins generated this way and the process will be still continuing since the costs is almost zero. Or amount of PoS generated coins and/or probability of block finding may be depend nonlinear from wallet. Anyway we could find some intelligent and economically justified solution.
What is needed is an algo which will assess a penalty (a drain) against any wallets holding excessively large stakes in the coin. This algo would constantly evaluate and be aware of wealth distribution on the whole network based upon activity recorded in the block chain (pseudo-anonymously). When the size or advantage of a wallet, or a quorum of wallets, or a "neighborhood" of wallets, reaches a certain threshold or relational structure, then the algo will trigger the "fission" of the coin balance (a small fraction of it) to occur in the designated penalty wallet(s), while the network makes corresponding microdeposits in another designated set of wallets, the beneficiary wallets.
A Fission event may (A) create new coin and/or (B) deduct existing coin. A Fission event occurs, for example, when one or more stakes becomes "too big," or an oligarchy of stakes becomes too entrenched. Fission causes the dispersal of coin from the big stake(s) into and among wallets deemed worthy of being beneficiaries. That opens a wide door, doesn't it?
Fission may accomplish wealth redistribution, or not. Its up to the devs and the market to decide which fission regimes are the best.
My preference is to have fission deduct from top stakes and drizzle the harvest into every other wallet on the network in statistically-defined patterns and portions.
This "fallout" or dust caused by fission can be distributed randomly in all wallets or apportioned methodically into the appropriate beneficiary wallets. Different coin developers can compete with different coins defining different ways to determine which "standards" and wallets are "appropriate." It would open up a whole new generation of PoS coins.
To sum up: In the proposed "fission" mechanism, whenever the algo determines that a critical mass exists in one or more wallets, or that the time has come to forceably reshape the wealth distribution profile of the network, the stakes in the one or more wallets undergo "coin fission," and each stake blasts a calculated sum of coin out into the community to be received however the devs have arranged it. The dynamics of any coin's fission rules can be customized and finely tuned.
And importantly, stakeholders can reasonably predict the consequences of holding a fissile coin, because the terms and criteria are published; however, stakeholders can never predict the precise timing and exact cost of any one fission event (so they cant avoid it). Thus they must acquiesce to the "stake tax" when investing in the coin or they must go find another coin to parasitize. Still, in a fissile coin, the largest stakeholders do gain enough steady growth overall to compensate and reward them for remaining dominantly invested in the coin.
My vision of Fission is that it tickles the big wallets more than it mauls them.
Thus, the above concept is a suggestion for implementing a "coin fiission" algo that might save us from the current doldrums of the "gotto go PoS" days of altcoins, where the imperfect infrastructure of the digital economy is selecting strongly for PoS algos even though we may be better off without much PoS.
The proposed Fission algo will operate upon wallet balances that reach a "critical mass," or throughout a network when it starts dying for lack of liquidity due to excessively large stakeholdings (e.g., high coin age). Fission imposes a size-dependent cost upon the largest and laziest stakeholders and it makes offsetting deposits in other wallets according to variable rules and goals. This will promote liquidity in PoS and will smooth out the rough edges of wealth-concentration patterns that would otherwise characterize a mature PoS network.
Got it? Great. Have a beta version in my inbox by tomorrow...
Your comments and criticisms are most welcome...
