As I've said before, in order for Neucoin to follow their strategic plan, they need these coins to distribute to others in compensation for helping to strengthen it. The presale is just a small part of this. If they sold a large amount during the presale, then users would mostly consist of people who just sit on their hands and pray the price goes up (like with most other coins).
Unless I'm mistaken, in a PoS coin, like Neucoin, you have to transfer your balance to the pool in order for it to mine for you.
And that is a problem. Centralized hot wallets are a real gold mine for hackers. Thats why exchanges usually keep most of their customer's coins in cold storage. But this isnt possible for a PoS minting Pool, because PoS coins must always stay online in order to mint. Furthermore, if huge amounts of PoS coins get stolen, it will not only harm the people who got stolen. It will potentially also harm the security of the whole network. Ever heard about the Vericoin/MintPal hack?
http://www.coindesk.com/bitcoin-protected-vericoin-stolen-mintpal-wallet-breach/Legitimate crypto communities always invoice people to not hold their coins in centralized hot wallets (and exchanges as well of course). But NoKoins hyperinflation even encourages people to permanently do so. NoKoin retards even believe its absolutely necessary for mainstream adoption. Once people lose their coins they might even leave cryto as a whole telling others about all the scams and how risky crypto is . This is rather going to hurt mainstream adoption than to help it.
Yes, that is the drawback. Hopefully it will help with the dismal security practises currently used in the industry. But preventing centralization is an important goal.
For someone with $100, this isn't such a big deal, but someone with $10K would have to worry about the security implications of doing this. So, the little guy trades security for earning a lot of extra compounded interest by joining the pool. However, the whales, and I use that term loosely, holding more than around $1K, would rationally keep their coins under their own control, since they can earn almost the maximum compounded interest by themselves and the risk of losing their coins in someone else's hands isn't worth it.
So, then, the number of holders of $1K or more independently mining will keep centralization from happening.
I disagree. First up, $100 might not be such a big deal for you. But it certainly is a big deal for others.
Yea, well, the world is an imperfect place. There is a trade-off with everything. If they didn't incentivize solo mining, then centralization would be an issue.
Second point is, there is only extra compounded interest for people who receive a higher compunded interest rate than the overall inflation rate. In order to achieve this using solo-minting, you must not only have enough coins. Even more importantly you must mint A LOT. Lets take the number from NoKoin example: 80% of all coins are minting all the time (on the basis of the shareholder structure it will probably even be more in the beginning). This means even someone holding coins worth of $10,000 or $100,000 has to mint around 19 hours every day just to obtain purchasing power. If hes too comfortable doing that, he will probably join the minting pool. Pool or depreciation.
I'm guessing you meant "maintain" rather than "obtain", and "not too comfortable" rather than "too comfortable". Maintaining purchase power (aka. making a profit), depends also on the growth of the economy using the coin, and that won't grow unless people are keeping it secure. Heck, Bitcoiner's currently suffer from around 10% inflation per year, and can do nothing about this (Bitcoins can't be staked) and they don't seem to concerned about it.
And the fact that a miner has to choose between a pool, depreciation, or single-mining, and the system is designed so his rational choice aligns with keeping the market decentralized and secure is actually a really good design decision.
A legitimate PoS coin would never utilize a 100% reward per year. PoS generally suffers from the rich get richer bias:
https://twitter.com/gavinandresen/status/421635550911934465Peercoiners call it a myth which I believe is credible since the reward is only 1% per year, also because of the minimum coin age (one transaction can mint 12 times a year at the most) and due to predictability. Compounded interest rate differences in Peercoin are almost nothing. Blackcoin has a much lower minimum coin age and no predictability in the fairly long term (such as NoKoin) but only a 2% anually reward, still somewhat negligible.
NoKoin 100% reward is deeply unfair and was probably just chosen to get angle investors on board of this scam train.
First, lets be clear. Only the first year will users be making 100% interest. After that, it linearly reduces down to 6% after 10 years.
Second, simple algebra shows that regardless of the reward percentage, as long as users are mining, the Rich maintain the same, "purchasing power" as you called it, vs the poor. Let A be user A, B be user B, and p equal to the percentage earned. Then A*(1+p)/ (B*(1+p)) = A/B.
