Thank you for this very interesting proposal. Unstable value and excessive energy consumption to me are key disadvantages of bitcoin.
A. Producing a Mint Block (MB) A Mint Block is a potential block of money that can be created by the network if several prerequisites have been met: 1) Sufficient transaction activity has occurred since the beginning of the last MB, 2) The current/prior MB has been completed, and 3) Between 5 and 10% of the MB's monetary award must be "burned" by potential minters in a limited time frame to join the Mint Block Queue (MBQ) to create new money. The MBQ is joined individually by those wishing to create currency and each queuer will be assigned to create 2-3 coins. A full MBQ proves to the network that sufficient demand for new currency exists and sufficient power is ready to create it.
More details. These restrictions place a brake on unbound monetary creation.
So you're using
proof-of-burn to allow minters into the MBQ. But then the coins are minted by proof-of-work. Do I get that right?
C. Achieving Stability and Reducing the Hardware Tax The intent of the complicated process of minting currency is to provide a stable cost to produce new currency. This in turn, I believe, will result in a reasonably stable value when compared to other commodities--perhaps even providing a stabler value compared to the whole basket than many or most other individual commodities. This requires a deeper explanation for the reasoning behind the design decisions which will be provided in the next post.
I think I see how you plan to achieve a stable value. Not exactly linked to fiat but linked to electricity cost (I'm not sure that this represents the whole basket better than national fiat currency). This way you adjust the speed of minting, but the block reward is always positive, so money supply is monotonically increasing.
How do you ensure stable value when interest in Decrits decreases? I didn't find any means to reduce money supply in your proposal.
I see three possibilites:
- self-adjusting demurrage rate. Affects all accounts. Might lead to a stable exchange rate, but not to a stable value in the "whole basket" sense
- extra transaction fees sent to nirvana. Affects only money in circulation and punishes those who are still actively using (spending) the currency.
- fixed inflation. The currency would not be stable in the long run, but would at least degrade in a more predictable way. Only works until more "value" wants to leave the currency than is destroyed by inflation anyway