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Author Topic: RFC: Coin with elastic block reward?  (Read 1100 times)
caish5
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May 06, 2012, 11:49:06 AM
 #1

So i always thought the idea in SC of modifying the block reward based on difficulty was pretty good.
However, in the beginning people were showered with many many coins and then later the block reward was cut dramatically.
While this has kept the price high i feel it is a little unfair that peoples mining reward was not consistent.

The early scrypt coins (FBX, TBX) killed themeselves slowly by having too high of a reward and ending up worthless after a huge pump and dump. LTC seems to be headed in the same direction now that interest has waned, difficulty has dropped and it's still spewing out coins. BTC seemed to escape this fate by being first and attracting a reasonably large user base fairly quickly. (Speculation and SR) Of course it's now well on it's way to it's first reward cut.

My proposal is to create a scrypt coin (to avoid the CoiledCoin MM disater).
Basic block reward would be just one coin plus 10Xdifficulty. (Litecoin now would gen 16 coins).
Over time the 10x would be slowly reduced until some time far in the future where the reward would be maybe just one coin to keep miners mining.

Hopefully using this method a huge pump and dump can be avoided and the path to some sort of adoption as a currency can be smoothed out.

So please have at it, thoughts, criticism any ideas on how this can be made to happen.

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May 06, 2012, 12:28:41 PM
 #2

So please have at it, thoughts, criticism any ideas on how this can be made to happen.
there is a scrypt gpu miner, and i could not see why you couldn't merge mine the scrypt coins.

caston
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May 06, 2012, 01:49:29 PM
 #3

This is an interesting idea. I also suggested making a coin that gets more "memory hard" over time. You could let the system cut the block reward if difficulty drops but consider allowing people
to mine at a higher level of "memory hard" if they wish. Blocks mined at this higher level have a higher reward.

You could also look at paying interest to holders so that there is incentive for investors to hold onto coins rather than pump and dump.

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May 06, 2012, 02:55:59 PM
 #4

So i always thought the idea in SC of modifying the block reward based on difficulty was pretty good.

If someone invents a machine that does 100Gh/s on 1 watt and costs 10 USD everyone would go out and buy one. BitCoin would adjust quickly but a reward based on difficulty system would generate coins at some crazy high rate inflating away the value of all existing coins.

You are better off with fixed rewards per block. Difficulty will adjust the production rate and the free market will adjust the trading value.
caish5
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May 06, 2012, 04:05:22 PM
 #5

So please have at it, thoughts, criticism any ideas on how this can be made to happen.
there is a scrypt gpu miner, and i could not see why you couldn't merge mine the scrypt coins.


I don't have a problem with merge mining per se, just in the very beginning while difficulty is low a giant pool merging and denying transactions is a problem. Right now the scrypt coins don't have support for MM so i figured it would make sense to use it.
If someone invents a machine that does 100Gh/s on 1 watt and costs 10 USD everyone would go out and buy one. BitCoin would adjust quickly but a reward based on difficulty system would generate coins at some crazy high rate inflating away the value of all existing coins.

You are better off with fixed rewards per block. Difficulty will adjust the production rate and the free market will adjust the trading value.


You make a good point there with the 100gh machine. The problem i see is that difficulty with fixed rewards does not scale with the number of participants very well, and has repeatedly driven the value of coins to near zero. I guess one way to go is a very low block reward.

Actually, is it possible to count users accurately while retaining anonymity and base block reward on that?
Or maybe base the reward on difficulty but have built in maximum as well.

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Strength in numbers


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May 06, 2012, 04:08:53 PM
 #6

So i always thought the idea in SC of modifying the block reward based on difficulty was pretty good.

If someone invents a machine that does 100Gh/s on 1 watt and costs 10 USD everyone would go out and buy one. BitCoin would adjust quickly but a reward based on difficulty system would generate coins at some crazy high rate inflating away the value of all existing coins.

You are better off with fixed rewards per block. Difficulty will adjust the production rate and the free market will adjust the trading value.


That's a really good idea!

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May 07, 2012, 12:24:14 AM
 #7

So i always thought the idea in SC of modifying the block reward based on difficulty was pretty good.

Can you explain what's good about it?

It may just reflect my distaste for the farce that is SC  - but the idea of modifying the reward based on difficulty strikes me as another pointless marketing wank.

Doesn't changing the reward kind of defeat the purpose of the difficulty adjustment anyway? What exactly is changing the reward supposed to achieve?
It seems like this will just make the thing harder to reason about and predict.
I don't even get whether you want more coins per day when more people jump in, or less per day. Either way - I don't yet see the point.


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caish5
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May 07, 2012, 01:29:59 AM
 #8

While it may be a bit of a marketing wank my reasoning is that i'm trying to come up with a way to avoid the rapid devaluation that has come with other alt coins. It's like a crazy mining frenzy for a few days, quick adoption by an exchange, a quick P&D, then it's all over. It seems that when they inevitably get to 0.0001btc each in value they are forgotten.

It may be that an elastic reward isn't required, maybe just a very low reward. Or even a reward that curves up then down over time.

Bitvolcano YAC, BBQ and WDC P2Pools at http://bitvolcano.com
Etlase2
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May 07, 2012, 02:54:49 AM
 #9

My proposal is to create a scrypt coin (to avoid the CoiledCoin MM disater).

Don't include merged mining and you won't have to worry about this disaster.

https://bitcointalk.org/index.php?topic=64637.0 - this is my proposal for using a difficulty-based coin award. unfortunately it features a big kludge where accounts are flat-taxed if mining drops. I think it would actually work pretty well for this style, but the threat of losing money, even if you're not losing value, will turn people off.
https://bitcointalk.org/index.php?topic=49683.0 - this is my proposal for a completely different style of coin not based on a block chain and does not require mining for security

caston
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May 07, 2012, 12:07:55 PM
 #10

You see the scrypt coins are more memory hard than the SHA coins but that's it. Their level of "memory hard"ness is static. Make a coin that has the potential to get more memory hard by offering higher block rewards to people that mine at this increasing level of "memory hard". Block rewards for lower levels of "memory hard" gradually diminish pushing miners to upgrade their hardware and and speculators to get excited about the possibility of new hardware that is faster at increasingly more memory hard math.

So make the block reward elastic but based on  the level of "memory hard" not on the difficulty. This directs the network away from energy consumption and towards technological innovation.

  

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