“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)