Chapter 0 Introduction
PoS currency deposits interest rates. Simple thinking is easy to draw two conclusions. Inflation and inflation are definitely garbage coins. The value of the currency is increased, and users like it, which is conducive to promotion and good currency.
Obviously, simple thinking is not enough. I want to seriously analyze the PoS interest.
- Observation: Bitcoin computing power and mining difficulty hit a record high in 2019, but miners have experienced the most difficult year in 5 years
- Stealing electricity, mining, and making quick money, what happened to these college students?
- How far is it from the era of “People Bitcoin Payments”? As early as 2011, there were encrypted payment applications.
- Is it planned to phase out the virtual currency mining business, will it accelerate the de-mining of mining?
- The price has plummeted and the computing power has plummeted. The data tells you whether BTC miners have sold off?
- Comment: Is mining a good business?
Chapter 1 Bitcoin is also in inflation
PoS currency inflation, yes, in terms of the number of coins, PoS coins are continuously increasing. But strictly speaking, Bitcoin is now also in inflation. Now BTC issues 1800 additional daily. The number of bitcoins was issued from zero. At the beginning of 2009, each block generated 50 BTC and issued 7200 BTC per day. The annualized inflation rate in 2009 was 100%, and the number of BTCs increased from zero to 2.628 million. From 2009 to 2012, the annualized inflation rate will decline year by year in about four and a half years. In the first half of the year, in 2012, the annualized inflation rate was 25%. After halving, the inflation rate was immediately lowered to 12.5%.
After the first halving (2012), before the second halving (2016), about four and a half years, the annualized inflation rate of Bitcoin has been reduced from 12.5% to 6.25%.
The annualized inflation rate of Bitcoin is now about 3.7%.
After the second halving, it will be halved three times (2020). In about four and a half years, the inflation rate of Bitcoin will be lowered from 6.25% to 3.125%.
This increase in Bitcoin will continue so regularly, until 2140, Bitcoin will stop inflation, the number is infinitely close to 21 million.
Chapter 2 The current inflation rate of the new currency and various PoS coins
Now all kinds of coins, whether PoW or PoS, are basically inflationary. But the biggest difference between all these coins and Bitcoin is the number of coins that the Genesis block contains.
The Bitcoin Genesis Block contains only 50 BTC.
New projects nowadays often include crowdfunding, ICO, etc. Receive the investor's money and send money to the investor. All these coins will be created in the creation block. For example, Ethereum contains 72,009,990.49948ETH in the creation block (60,108,506.26ETH is sent to investors, 11,901,484.239480ETH to the Ethereum Foundation).
At present, the birth of a large number of various coins will contain a lot of coins in the creation block. EOS's creation block contains 1 billion coins; Vsystem's creation block contains 5,124,858 million vsys; Cosmos contains 236,635,290 billion atoms in the creation block.
After creating a large amount of coins in the creation block, all of these chains, whether PoW or PoS, will continue to issue a small amount of coins per block. Just like Ethereum, every block now has 3ETH added.
With the increase in mining, it will form an inflation rate in quantity. EOS annualized inflation of 5%, Comos annualized inflation of 6.94%, Vsys annualized inflation of 5.5%.
In general, PoS coins rarely have a regular increase in the number of additional shares like Bitcoin until the 0 is issued. The block rewards of the PoS coins that are currently seen are fixed, and there is no such halving mechanism as Bitcoin. That is, the setting of the PoS currency is often unlimited.
Chapter 3: French currency is inflation
French currency, such as the renminbi and the US dollar, are all inflationary. We generally measure the inflation rate of the French currency according to the total amount of M2. But the M2 thing can only have a statistically significant data, not as accurate as a digital currency. According to official statistics, the annual inflation rate of the US dollar is generally around 3%. The annual inflation rate of the renminbi is very reliable, but everyone says it is 8% or even higher.
Gold is of course also inflationary. A lot of new gold can be dug every year.
Diamonds are more inflationary. The newly dug diamonds have gone.
Bitcoin is also inflationary in our lifetime. After we die, we will be constant in quantity, even deflation.
Chapter 4 Inflation and Depreciation
In people's imagination, inflation is often associated with depreciation. The purchasing power of legal coins continues to decline, which is evidence for everyone. In fact, it is not that simple.
The relative size relationship between the quantity of money and the total amount of the corresponding economy is the key to depreciation and appreciation. Considering money as a general commodity, especially a digital currency, its own price also has to comply with the law of supply and demand.
The increase in the number of digital currencies corresponds to an increase in total supply. As long as its demand is also rising, and the increase is greater, it will not depreciate, but will increase.
Whether it is PoW coins or PoS coins, the increase in the number of coins cannot be simply thought to lead to depreciation. The key is to see if the increase in quantity can correspond to the increase in demand.
Scarcity refers to the fact that demand is greater relative to supply, not to a smaller number.
Chapter 5 Design of PoS Mining
There is a difference between the specific blockchains for the issuance of coins under the PoS consensus mechanism. Mainly in the following dimensions.
1. The rate of additional issuance.
2. Liquidity setting. Whether the coins involved in the mining will be locked, and the lock cycle.
3. Is there a mechanism for destruction? Some currencies are only issued, not destroyed, and some have destruction and additional mechanisms at the same time.
4. Participate in the threshold of PoS mining. We compare three projects, EOS, Cosmos and Vsys.
The annual inflation rate is 5% for EOS, 6.9% for Cosmos, and 5.5% for vsys.
It takes 72 hours for EOS to redeem after mining, and 21 days for Cosmos redemption. Vsys redemption has no lock-up period. Vsys has the best fluidity.
EOS and Cosmos have no destruction mechanism, and Vsys' trading miner fees are destroyed by the system.
I tested the mining of three coins, EOS and Cosmos are dependent on the fire coin pool to gain income, the HPT of the fire coin pool. Vsys is the most direct, and there is a rental function directly in the wallet. Any user can participate in PoS mining very simply and get Vsys coins directly. Vsys is the most convenient and simple to blast in depositing coins.
PoS issuance should be tilted as far as possible in a favorable direction for the user to increase demand. So I think the fourth point is deterministic. It must be as low as possible, so that users can easily realize the benefits of holding money. It is good to integrate the very convenient PoS mining function in the wallet.
I think that many PoS projects are not doing well. Most of the mining of PoS coins requires a third-party company to help users mine, and then the company distributes revenue to users. Like EOS, the voting function is too complicated, and block.one also declares that it is forbidden to send interest to users, which is not friendly to users. I have always been very surprised about this, why should I set this up? I have consulted many people. It seems that because of the provisions of some securities laws, it is said that it pays dividends directly to the holders of the money. It is a kind of securities that is subject to the law. However, I think this is a bit far-fetched and is not conducive to expanding users.
Users certainly need a high rate of additional issuance, but users prefer prices to rise. If a large number of additional currency is issued, almost zero cost of additional issuance, there will be a huge selling pressure in the market, and the price pressure will be great. Especially in bear markets, the bigger the rate of increase, the faster the price collapses. It is much better in a bull market.
I should not understand how much it should be designed. As for the design of the inflation rate of PoS coins, if I shoot my head, I will design according to the inflation rate of the US dollar. I think it is quite good.
As for the destruction mechanism, I can't say anything rigorous. Few blockchains are currently designed on the system. However, almost all platform coins, especially the exchange currency, have project-side active destruction mechanisms and implement this mechanism as a way of distributing rights to holders.
Ethereum plans to join the destruction mechanism, and Ethereum said it hopes to destroy half of the gas (miners' fees) in the future. Vsys directly destroys all trading miners' fees.
From Bitcoin, in such a constant total design, destruction is definitely not right. But the unsupervised mechanism of PoS, I think the existence of a destruction mechanism is reasonable.
Chapter 6 Conclusion
I can't think of PoS as a hot spot this year. PoS interest represents the user wanting more coins. Is this a symbol of the bull market?
Author: Huang Shiliang,
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