I'm one of the developers at Netcoin foundation, my user name was originally 'Shrodingers Cat' on the netcoin forum but more recently 'who'.What is APR, PIR
The APR is an 'Annual' or yearly target interest rate. When a Proof of Stake block is awarded, the annual interest rate is converted to a daily rate, and applied based on the age of the staked coins in days.
We also have implemented POSV, which means users who stake regularly to secure the network earn the quoted APR, but users who keep their wallet closed for months at a time and do not help to secure the network with POS staking will earn less than the quoted APR.
PIR: Personal Investment Rate
A big decision on the POS implementation is what interest rate to choose for staking rewards. We need to bear in mind that alt coins are now a very competitive area. We discussed for many weeks, what interest rate to choose while we developed the wallet. Once you release it, you can't easily change it. We then had the idea that a rate that increased for larger holders of the currency would surely encourage people to want more Netcoins. The more you get, the better the rewards. If its a sliding scale its always better to obtain more NET.
We called this idea 'Personal Investment Rate' or PIR. The number of NET you stake determines the Annual interest rate that is applied to the transaction for that reward. We at Netcoin invented this idea as far as we know, but there are a lot of coins out there, so I'm happy to stand corrected if I'm wrong. This annual rate is then converted to a daily rate and applied to the coins based on their age.> What is the reason for interest rates for such NET amounts owners?
Interest rate is really a measure of risk and reward. (In finance an Interest Rate is often called a 'Risk Rate'). The large holders are exposed to a _lot_ of risk because the price of crypto currency rises and falls dramatically. Much more than normal fiat currency. This is one of the reasons they get a higher reward, to reflect the higher risk they are taking. The second reason your interest rate rises a little bit with every extra Netcoin you obtain is to creates a desire to obtain NET. This is a good thing for keeping the market active and encouraging users to 'stick' with Netcoin once they try it.
I do understand your concern about the rewards being 'dumped'. That was actually my one biggest worry if we set the interest rates too high. We did not want to create a ridiculous uncontrollable increase, so we have designed into the protocol from the start that the interest rates will change after 1 year and 2 years to close the gap between high and low holders. This reflects that fact that by that time, the risks will be lower. Whether NET succeeds or fails will be pretty certain by then and it wil hopefully have settled into a fairly stable price with huge adoption, and lots of backing services. In the first year, we simply want to encourage lots of people to try Netcoin, to like it, and to want more while we get on and release services like shops and auctions and other things, to create a real secondary economy around Netcoin.
Here are the Annual interest rates (APR) for Years 1 to 3, Year 2 will start at approximately August 2015 and Year 3 at approximately August 2016 depending on the speed of the blocks, which should average 1 per minute.
Netcoin Annual Rates. It is a sliding scale between the values displayed below
Why all of the new decisions?
Netcoin needed to do something special to make sure it is not a simple copy of the hundreds of other POS and POW cloned coins out there. We wanted to give the community a truly unique coin.
The reason to change to POS was discussed for several months on the Netcoin Foundation forums. Opinion was mixed, but many members welcomed the opportunity to switch to POS because the mining rewards and price had crashed, and nothing 'new' was happening:http://forum.netcoinfoundation.org/thread/608/general-brain-storming?page=7
coinshaer on the 27th May 2014:
>>Many coins have POS so it´s nothing new, and not one of them get an advatage in the value out of that. I think we need something really new.
BUT the fact remains that POW is not profitable anymore either. ASICS are making Scrypt POW mining actually unprofitable - look at http://www.coinwarz.com/cryptocurrency Nearly ALL coins now mine at a LOSS.
So I think I speak for all members of the Netcoin Foundation Forum when I say that something new had to happen with Netcoin.
But the big problem with implementing TRULY NEW ideas like these is you _cannot discuss them_ in an open internet forum. Somebody will copy them quickly and release a new coin with all your ideas before you have chance to implement and test them on an existing coin. However we spoke to several people in private, including exchange owners, very large cryptocurrency investors and current users of Netcoin to see what they thought of the various ideas and they all were excited by the plans.
If you look at the cryptsy chart for the last two days, you will find a strong correlation between the timing of those buying spikes and the Netcoin changes announced on this board.
People are coming back to the forum, leaving comments like this:http://forum.netcoinfoundation.org/thread/721/posv-rewards-blockchain-guardians-netcoin#ixzz3BB9VNVtLThis is turning out to be even better than I thought!
My original understanding of this upgrade was simply POS introduction.
Then I discovered the invention/inclusion of PIR.
And now POSV! Absolutely amazing!!
You guys are doing a fantastic job here, creating a really outstanding coin.> I think biggest exchanges are probably the biggest owners of NET. Will they get 100% of annual interest rates? Will they dump new NETs to their clients buy orders?
We did speak to some exchanges, and as far as we can tell, exchanges do NOT generally enable stake mining. The reason is that it moves money around in the wallets (spends coins, generates coins and creates more transactions), and creates a big accounting problem for them. Will you cancel your decisions? Why wouldn't you cancel all of this big mistakes?
The only thing that would cause us to change would be an unforeseen problem. We have done lots of testing on TestNet and are pleased with the results. I do respect your opinion, but many people are very excited by what we have done here. I would like to know more about why you think they are mistakes. I welcome your discussion and encourage people to challenge our ideas. It helps us grow stronger and work towards a better currency.>Who from Netcoin Foundation did suggest and make such decisions?
Well I (who!) suggested some of them. Many other members in the community agreed with them, so I did my best to implement them. For free. Lots of people have invested in NET, in time, hardware and money. I also bought about half a million NET with fiat cash a couple of months ago when the price was 00000150. (It was about the price of decent graphics card.) That's how much _I believe in what we are doing_. I thought it only fair I should have something to lose (or gain) depending on the quality of my coding and outcome of the decisions we made during the development. We challenged and discussed at great length everything that the team suggested. Nobody wants to lose out. I owe it to them and myself to give them the best I can and try to help the foundation make the best decisions for the currency. That's why a took a real financial risk, to focus my mind and put my money where my mouth is.>Foundation did nothing this year. Why did you do this?
Precisely for that reason
'Its About Time!' was a common comment following the announcements.
As for them doing nothing, you have to bear in mind that you can't force unpaid volunteers to do anything. Lots of things have been going on behind the scenes, servers need to be paid for, software needs upgrading. websites need updating. Marketing, translations etc. We need people to help out.How much NET does Netcoin Foundation hold?
'Admin' on the forum would be happy to answer that question. though I can see there is just over 100,000 NET in the development pot for an android wallet. I believe a lot of the initial mining rewards paid for the casino software and bounties for setting up and configuring the various servers. This is why the netcoinfoundation has such as great forum with lots of unique features.