Decred proposal: Change PoW/PoS Subsidy Split From 60/30 to 10/80 | Hacker News Reader

Decred proposal: Change PoW/PoS Subsidy Split From 60/30 to 10/80

proposals.decred.org

47 points100001_10001139 comments

This is kind of hilarious. They seem to be upset that the miners are selling their coins and therefore are sabotaging the cryptocurrency by pushing the price down.

Yes, I'm curious to know more context on why they see miners selling the coins as proof that they are malicious actors trying to keep the price down. The very nature of PoW is that miners typically have high expenses, and need to sell coins to pay their power/hardware bills. To the extent that this hasn't happened in bitcoin, it's because capital is currently cheap enough that some of the big miners prefer to hold the bitcoin and borrow against it to cover expenses.

The utility of Bitcoin is that it allows you to bypass government and regulations and high cost money transfer services. The price should reflect that utility and anything beyond that is day trading or beanie baby style speculating

More context https://www.youtube.com/watch?v=dPDak2o9VSk

If there's nothing else the coins can be used for, selling is the logical conclusion, holding is just being the sucker who sells last.

(also applies to dollars)

The sucker who sells the last dollar has other problems, most likely the total collapse of a superpower means that not being able to trade your dollar is not going to be the most preoccupying thing on your mind.

Sure, in the sense that both this potted plant and this currently inactive volcano could soon start ejecting red-hot magma. Because one of every x billion "things" are active volcanoes, and these are both "things".

And worth stating that the "other side" is the proof of stake participants, who hold the currency and want the price to stay high.

Both groups have just as much incentive for the price to be higher, it's a moot point.

That's not true. The miners have a large capital investment in mining equipment which can be used for other purposes (or they rent, in which case the same reasoning holds). Proof of stake participants have their capital in the system's currency. The PoW are less sensitive to price because they lose less capital for the same change in price as compare to PoS participants.

Decred has ASICs available, and (hardware) miners are usually the largest fixed cost for miners, so Decred miners do have a fairly large interest in keeping the price high at least in the medium-term of their hardware’s lifetime. Unless other cryptos of similar size are also using BLAKE-256 as their hash algorithm.

> Proof of stake participants have their capital in the system's currency.

Their capital can also be moved to other proof-of-stake coins with complete ease, I'd argue that's far less friction than repurposing your mining ASIC's for other coins on a whim. An ASIC is useless unless it runs the same algorithm, which in Decred's case is basically no other coins.

> The PoW are less sensitive to price

Yes, and as such more likely to ride the out fluctuations rather than create a self-sustaining wave of those who secure the network selling out all their holdings and moving elsewhere.

This and paulgb's reply are both good points, but I think that we can do a very simple analysis to explain most of what is going on.

Suppose that miners only mine and stakers only stake. Maybe we could justify why that is the case, but for simplicity we can start with a model where that's just taken as given.

Also suppose that participants do only two things with their mining and staking rewards. They take profit by selling, or reinvest.

Miner's reinvest by selling the token and buying more equipment or funding operations. Stakers reinvest by staking more token without selling.

All else being equal between the two except for the fact that one is mining and the other staking, the miners will sell more of the currency.

Under this simple model, it's easy to see why miners are more sensitive to price in the short term and are more likely to sell. Of course this model isn't perfect, but I think it's close enough to explain the structure of the debate.

PoW can jump to another coin without writing off their investment (into hardware), PoS can't.

Decred has ASICs and there is nothing they can realistically jump to.

With PoS it’s even more liquid as you can dump your tokens and buy them on a new network to stake their. Assuming the tokens are worth anything.

I don't know how decred works, but typically there are consensus level barriers to this to mitigate "nothing at stake" attacks. For example you may need to lock the tokens for weeks or months to use them as stake, and it may be impossible to trustlessly transfer ownership of locked tokens.

Well they are selling in malicious way, for example they never put a lot of coins to sell at same time, so if someone wants to buy a lot, it show no liquidity, But you can buy pretty much as much as you want without changing the price, bots keep adding, Another way is they keep adding more when price breakout.

For me it is clear some group of people got an advantage (hardware and electricity price) and do that with a couple of alts projects in order to get more btc.

This looks like a fairly naive trading bot, not “selling in a malicious way”.

It's not because miners are selling but because HOW they are selling. I recommend reading these two well-researched blog posts if you want to know the details: https://medium.com/@tacorevenge

Of course it all comes down to some equally hilarious technical analysis :)

Please read the link and the blog post below. Its not due to miners simply "selling".

https://medium.com/@tacorevenge/

What's decred? What's special about it and is it one of the bigger cryptos?

Decred was created in 2013 as "bitcoin but with governance". You can earn it through both proof-of-work AND proof-of-stake mining. Users who participate in proof-of-stake mining can vote on proposals such as this one. (Their voting power is roughly equivalent to how many DCR they've locked up.)

It got a lot of attention when Bitcoin was having its block size limit controversy around 2015 (which led to the fork between bitcoin/bitcoin cash).

Decred is a cryptocurrency who’s core offering is an expanded governance system. Although at the top it’s pretty much run by the company right now.

Decred is a SOV crypto. It has governance, a treasury fund, staking rewards. It has a very low supply. So much of it is locked into the staking pool.

What is SOV crypto?

Searching for it seems to bring up a specific coin (https://sov.foundation/) but I'm guessing that is not what you mean.

SoV = Store of Value.

It's often used to describe a capped supply.

As if that implies preservation of value.

Wouldn’t it be roughly equivalent for a miner to put the amount spent on overhead and recurring cost such as electricity into staking and then sell or “dump” the staking rewards assuming the % payout is the same? It seems given enough time, with all be it potentially new entities, you risk being back at where you started.

However I’m not familiar with Decred and only have a general idea of PoS.

I imagine that the difference in profitability between PoW and PoS is arbitraged away over time. If it's a lot more profitable to PoS mine, some of the PoW miners would just switch over, which in turn makes PoW slightly more profitable for everyone still doing it.

The coin is "Store of Nothing" and controlled by a handful of people (company 0). It's the big player manipulating the price and voting, not the miners.

The coin will die with the company's ego. Avoid it.

Got any on chain data or research to back up your claims ?

Cause there is onchain data to prove miners dumping in a malicious way to keep price suppressed.

https://medium.com/@tacorevenge

You sound like a miner who is finally getting their dues.

While I am sure that c0 has a larger than average holding, the voting patterns indicate they dont always get what they want.

The large mining groups are mining Decred just to sell it for Bitcoin. They are helping Decred at all. This didn’t happen to Bitcoin during its early days, if so it wouldn’t have survived.

Edit. They are NOT helping Decred at all

Miners being in it for the money instead of for the ideology? What a shocker.

There’s nothing wrong with a neutral, politically uninterested party running the infrastructure for profit reasons. In fact it’s probably better than a bunch of charged and opinionated members trying to sway influence one way or another.

It’s a store of value!*

* as long as miners are benevolent and don’t sell it

miners are supposed to be in it for the money

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