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2014/12/26    PoW (Bitcoin) vs PoS (Peercoin), for dummies

“Raw PoW works by finding hash with specified nonce.
Peercoin uses a timestamp and one of your transactions for this. This means you can’t win with a faster computer, as you can only hash once a second. All is needed is a stake and by having a larger coinage you stand a better chance to find a winning block.

Coinage is bounded between 30 and 90 days. Any unmoved coins will only be valid for minting after 30 days. After 90 days, their coinage is capped and cannot increase.
The hash includes previous blockchain data as well as a timestamp (in seconds). Any computer in the network will check that the timestamp in the new block matches the current time – it can reject the block if this doesn’t match.

So a verbal description of the PoS solution in PPC is:
hash(oldblock, timestamp) < target * coinage”

 

Source: r/peercoin, nov. 2014

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2014/12/23    Primecoin – The Hope

“Thanks for your support of primecoin. I think it’s fair to say that I designed primecoin not only as a breakthrough as scientific computing apparatus, but actually as a quality replacement of other more dominant PoW cryptocurrencies as they ignore the long term security challenges. Rebranding though is not necessary I think, at least the English name Primecoin does not really limited it to prime numbers, so I think the name is fine as it is. It may appear that primecoin has less development support at this point, but at least from my point of view primecoin would have my support. My current undertaking on sidechains, might even be tried on primecoin first, due to it’s different properties. Although this shouldn’t be taken as a promise. But in any case, if sidechains materialize primecoin would also have my support at some point.”

“Hi crypto_coiner, long-term bitcoin security relies mainly on transaction fees. primecoin realistically would continue to have some subsidy long term, so less reliant on transaction fees for security. I am of the opinion that the PoW sector and PoS sector would coexist for a long time. Although recently primecoin was lackluster in the PoW market. There was no plan to combine the two currencies, they were designed as two separate networks, both with strong security. Peercoin is better as savings instrument, primecoin is better as transactional medium. Best Regards,”

Source: Emails between Sunny King and Crypto_coiner, Summer 2014 (through the peercointalk chat box)

 

List of Primecoin clones/derivatives:

“pNut – FTW https://bitcointalk.org/index.php?topic=435232.0, https://cryptocointalk.com/forum/761-pnut-ftw/
Bernankoin – BEK https://bitcointalk.org/index.php?topic=375010.0
Datacoin – DTC https://bitcointalk.org/index.php?topic=325735.0, https://cryptocointalk.com/forum/487-datacoin-dtc/
CDNcoin – CDN https://bitcointalk.org/index.php?topic=393190.0, https://cryptocointalk.com/forum/566-cdncoin-cdn/
Primecoin – XPM https://bitcointalk.org/index.php?topic=251850.0, https://cryptocointalk.com/forum/280-primecoin-xpm/

And Riecoin is a modified clone of PrimeCoin, it uses prime constellations for PoW:

Riecoin – RIC 446703.0 https://cryptocointalk.com/topic/4914-riecoin-ric-information/”

Reason why there are a very few Primecoin pools: nobody knows how to make pools – With the exception of a handful of developers.

 

Source: bitcointa.lk (June 2014)

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2014/12/18    What is going to be the perceived value of Peercoin, Primecoin and Bitcoin?

“Peercoin improved upon Bitcoin by dramatically reducing the cost of network maintenance and giving control of the network to the owners of network assets.

Both of these networks contain a critical flaw which Nu resolves. These networks permit the purchase of scarce units used in the networks which function much like shares. If the value of the network rises, the value of these “shares” rise

If the value of the network rises, the value of these “shares” rise. This dynamic has been critical to the success of these networks as it allows anyone to purchase a stake and benefit from promoting the network. These networks have simultaneously been promoted as currencies but have not functioned well as such.

Let us suppose I am wrong and that volatility will be eliminated in these networks. In that case they would serve well as currencies but poorly as shares, because they would not appreciate, nor give dividends. This would likely cause a selloff of these “shares”, thereby introducing volatility once again.”

Source: NuBits white paper

 

 

 

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2014/12/18    Peercoin ultimate price – minter as utility

“Value will be greatly determined by how wide the Peercoin ecosystem becomes.

The most valuable asset of Peercoin is its time-tested, simple, robust network. On top of it, lots of blockchain-based application can be made to work. The price of PPC will be the price of your shares of contribution to keep this network running.

The Peercoin minters can be seen as small utility companies. The minters will find a way to sell their minting power to the highest bidder businesses that need it.

Suppose there will be a lot of services that would like minters to secure their network. Peercoins could be used in such a way that:
- You can select services that your minting supports,  conveniently, probably from the wallet interface.
- You will be compensated by POS block reward paid by the services you mint for.
- You are willing to have a bigger size of your local blockchain as a price to pay for supporting the services.
- Motion voting (in NuBits)  is akin to minting for a service.”

Source: peercointalk, 2014/12/18

 

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2014/12/16    2 Grave Inconsistencies of Bitcoin

Bitcoin bears, at least, 2 inconsistencies, that are substantial impediments to its adoption by the mass, and probably constitute internal death blows:

1) The Satoshi protocol, which is the blockchain is powerful and significant if and only if:

- it is distributed over as many self-contained nodes as possible

- its processing and execution operated in as much decentralized fashion as possible

 

2) The Value Proposition of Bitcoin, the token, purported towards end-users is that they can transact with it (a currency feature).

However, even the very bitcoin passionate evangelists use it as an investment instrument (bet?) with the speculation that the price will rise enough so that they can make a huge profit.

 

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2014/12/14    Benefits of offering NuBits on an exchange (from the trading perspective)

“If traders on these exchanges believe the value of their holdings will go down, they will sell their digital currencies for fiat money such as US dollars. The traders then need to either hold the fiat money on an exchange (which can be a target for theft) or withdraw the funds (which can be slow and inconvenient).

NuBits eliminates this frustration. Traders can purchase NuBits as a stable hedge rather than liquidating their holdings to fiat money. These NuBits can then quickly and easily be transferred off exchanges into private wallets. NuBits makes trading digital currencies easier.

What this means is that users can rely less on USD, and instead hold NBT as a tool for maintaining the USD value of their portfolios. One would imagine that the primary concern is trading volume (for the fees), and that holding additional USD on one exchange only introduces more regulatory/compliance risk.

Of course, in the long term the main benefit of offering NuBits trading is that the market will be demanding it. 2015 will be the year that stable-value digital currency projects become the norm. Of all the projects that currently exist (BitReserve, LOCKS, CoinUSD, BitUSD, Tether, etc.), NuBits has by far been the superior competitor regardless of the metric used to evaluate success: price stability, liquidity, decentralization, or user simplicity.”

source: discuss.nubits.com (2014/12/14)

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2014/12/14    How do NuBits maintain their $1.00 US value?

“There are three mechanisms to prevent Nubit going below 1usd.

- Shareholders can vote for high interest rates for parking nubits, which generates synthetic demand.

- Shareholder can vote for “burning” rate where nubits holders gets paid to burn NuBits, reducing NBT overall supply

- Liquidity Providers offers their service to buy at 1$ in the open market.
It is already working, with nearly 0% parking rates as demand has been high.
However, a currency burning of NBT to NSR implementation is drafted here (=Draft motion for currency burning).
This would potentially solve the issue of over-supply, in  case of emergency (not probable).
The whole point is to further separate any risk from NBT and place it on NSR. If inflation was getting to critical levels, shareholders would vote to allow NBT to be destroyed in exchange for NSR. This lowers the value of NSR, but brings greater protection to the network as a whole. NBT users aren’t affected at all, a NBT is still worth $1.00.”

Source: r/cryptocurrency  (2014/12/14)

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2014/12/14    Peercoin Ultimate Price – Cost of Minting

“Some people say that Bitcoin price reflects its cost of mining. I am curious about the price of 1 PPC, since it is energy efficient – what would be its ultimate price? intrinsic value purported to Peercoin network?

 

It’s not true that Peercoin has no cost of generation. If that were completely true, wouldn’t people generate a lot of peercoins for free and sell them on the market?

 

It does cost something to mint. It costs an investment.

Basically, if you buy 100 PPC, at the current difficulty it would cost you about 45 years to generate 100 PPC with them (if the PoS difficulty stays the same, which is more likely to be not true).

So, if the PPC demand is increasing, people won’t want to wait 45 years to get those 100 PPC minted “for free” (from your terms). And instead will buy the ones that are available on the market. Which at the moment are mainly generated with PoW (Miners are directly dumping on the market for FIAT or BTC to cover electricity/hardware costs. Minters are holding).

In short if you want the PPC price to raise we need to cut mining and thus PoW.

To compensate the 1% inflation with PoS we are also destroying the 0.01PPC transaction fee (which may be problematic if PPC price reaches $100-$1000).

In short, at the moment PPC price reflects its cost of mining. Cut mining and PoW and you’ll have a PPC price explosion.

 

Coin price is not determined by the mining cost in general. In terms of hash per watt it does cost a lot to mint new Peercoins because minting is the same as mining except every stake can only do it once per second. There are about 3,000 stakes finding 25% of all blocks. So there are about 12,000 stakes for the entire peercoin network, each making one hash per second . Compared with bitcoin’s 300,000,000 G hash per second, a block of peercoin should be about 30,000 billion times cheaper than a block of bitcoin if the price is determined by how much hashing is needed

Price of peercoin (or anything) is determined by supply and demand in a free market.”

 

Source: peercointalk (2014/12/12-14) and r/peercoin(2014/12/12)

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2014/12/14    Peercoin as Backbone

“1. Peercoin as Store of value
Since the efficiency of minting is greater then Bitcoin and, over time might become more decentralized then Bitcoin, I think Peercoin has the potential to become a store of value coin.

In a wider financial context I guess that the store of value feature, would be come in use as collateral and for a private person this would be like savings or something. Used as a collateral, it would be included in cryptographical contracts and you could also see a derivatives market blossom around it. As such it has the potential to become an integral part of a sophisticated financial market.

Especially so if Peercoin starts to interface with more and more ecosystems, which brings us to…

2. Peercoin ubiquity
The more external ecosystems that Peercoin technically interfaces with, the more use it will have. If Peercoin is always there when you want to transfer value between point A and B, then Peercoin could be used as providing backbone liquidity. I.e. because its presence _everywhere_ you know you can depend on it for your transactions. If you want to liquidate BIG value and need money, then peercoins should be an alternative (right now bitcoins is it in cryptos and in fiat its all about US treasuries).

This was about Peercoin as backbone currency in a wide diverse ecosystem, tying many different ones together, i.e. becoming a bridge between other ecosystems.

3. Peercoin as backbone for DACs
Peercoin could be used as a store of value, for decentralized autonomous organizations. If NuBits saved some of the peercoins it bought and did _not_ pay it out in dividends but instead saved it, then peercoins could be used to one day support the NBTUSD peg. The crypto that I’ve invented (but have not yet talked publicly/or even privately about) make use of this. Should share price drop, the network would still be capitalized by the peercoins kept as store of value. This makes the DAC valuable not only because of its traded share price, the product/service it offers, but also the peercoins it is holding.

4. Peercoin as a backbone network for side-chains
So… I think I’ve figured out a mechanism that would make Peercoin extremely useful as a backbone crypto. I’ve emailed Sunny about it but have not received an answer yet. I have to give it some more time and then I’ll spill the beans about this one here. So to be continued.”

Source: peercointalk (2014/12/13)

 

 

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2014/12/13    Bitcoin has no organic demand and is just being traded, until collapse

“News like Paypal accepting Bitcoin, Dell accepting Bitcoin, Microsoft accepting Bitcoin, company X accepting bitcoin has no other effect than a massive instant pump and then collapse.
It has been noticed several times in the past and will always happen like that. The pump is caused by noobs who don’t understand trading and get trapped by “good news”;
Real traders know that when this happens the coin becomes overpriced and they massively sell creating a karma reverse, in other terms collapse.

Noobs will never learn that good news = instant pump followed by massive dump in a downtrend market.
To be more specific, you have two kinds of good news: people’s bitcoin adoption and company’s bitcoin adoption. The first pumps the price up, the second drives the price down.
If you want an uptrend we need people’s adoption. If you want a downtrend we need either bad news or news about how to spend more bitcoins.
Paypal, Dell, Microsoft = one way spending, from Bitcoin –to–> FIAT.
The same thing would happen tomorrow if Google or Amazon would accept Bitcoin, the price will go deep down. (right after a massive pump, like said before)
Most of those trapped at 350 haven’t sold yet, they became little bad holders and it is very likely that they will panic sell whenever the price will reach 337.
Those people are the same people who pushed the market up, they are the same people who will amplify the downtrend.
Support will eventually be back on PPC if BTC crosses 300.
If you haven’t noticed someone bought 44K PPC. And still has 22K to buy.
The same person will also eventually push the price up once he’ll be full in.”

Source: peercointalk, 2014/12/13

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