Quote from: funkenstein on April 08, 2015, 03:13:58 PM

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Duplicate stake punishment: NeuCoin uses a client version developed by Michael Witrant, aka sigmike (core developer of Peercoin and Technical Advisor to NeuCoin), that not only detects duplicate stakes so that honest nodes can reject them, but also punishes nodes that broadcast duplicate stakes by rejecting all blocks broadcast by the dishonest miner.

I'm not sure I follow this. If I were trying to do a reorg. attack (grinding, in the terminology of this paper) to rewrite some history, I am not going to broadcast anything until I have found a chain that works. Then, when I broadcast it, it will not have any duplicate stakes. It will follow all the rules.

Hi Funkenstein,

Thanks for the feedback

The duplicate stake detection mechanism's purpose is to prevent miners from mining on multiple chain when a natural network fork occurs. Without this system miners could mine on both (or more) forks in order to avoid having their block orphaned and this would hurt the consensus.
It's not a security measure against people creating a fork in order to rewrite the transaction history.

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Well this is actually a good point, and does address a potential problem worthy of discussion. This is a problem of economics, not of PoW. For example, one could create a PoW currency that also gave a 6% annual inflation. The money supply curve is important.

The chosen inflation level is not the only parameter that matters.
If you consider a PoS and a PoW coin that are economically identical (market cap, inflation, transaction volume etc..) the cost of an attack will be orders of magnitude higher in the case of the PoS coin.
Let's imagine as you say that the PoW coin uses a 6% inflation rate to pay for security and both coins have a $100B market cap.

In the case of the PoW coin, the cost of a 51% attack will be 51%*$100B*6%~$3B
In the case of the PoS coin, let's suppose that with a 6% inflation rate, 50% of the coins mine, then the cost of a 51% attack will be: 51%*$100B*50%~B25$

And this doesn't even take into account the fact that in our example the actual inflation rate for the PoW coin is 6% whereas for the PoS coin it's 6%*50%=3%.
Therefore, the PoS coin is paying twice less for a security level ~8 times better.

Quote from: funkenstein on April 08, 2015, 03:13:58 PM

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NeuCoin's mining equation is simply:
hash(kernel)< target*balance of UTXO

OK, so now we see that the best way to mine NeuCoin is to form massive pools. This is not incentivised due to smaller more regular payouts like it is in bitcoin, but a directly higher return due to the formation of a larger UTXO balance. This looks completely broken to me. Am I missing something?

I'm not sure I get what you mean by that? Your probability to win depends on the size of your stake.
Let's imagine you and I both own 100 neucoins.
If we mine separately, we both try once per second (therefore, together we try twice per second) to find a solution to:
hash(kernel)
If we put our coins together, we will once per second try to find a solution to:
hash(kernel)
So it's exactly the same as trying once per second to find a number between 1 and 1000 or trying twice per second to find a number between 1 and 2000. The odds of succeeding are the same.