Quote from: Peter R on May 28, 2014, 08:04:27 PM

It is very possible that spin-offs don't have a big future.

I just think you're advertising spinoff coins with distribution based on the existing BTC block chain in completely the wrong way. They shouldn't be referred to as altcoins, their main usage will be an insurance plan for Bitcoin itself. If and when things like transaction fee only block rewards fail to incentivize miners to keep the block chain secure, you can have a fully functioning backup system with 1% annual increase (or other magic number) ready to go. The problem is, Satoshi doesn't like magic numbers even though he gave them to us with transaction fees.

In time, I think we will discover there are several numbers that need to be followed in crypto in regards to inflation and interest rates that aren't magic at all, and we'll have upper and lower bounds for what works and what causes disaster.

I'm pretty confident the magic number for PoS interest rates for a coin that's been fully mined will be somewhere between 2-5%. Not that groundbreaking of an idea, I know, but there are many people making coins coming up with horrific economic numbers.

My post further trying to explain proof of stake interest rates and magic numbers below:

Quote from: r0ach on May 26, 2014, 09:54:14 PM

Since almost everyone I see doesn't understand the economic implications of stake reward, let me explain it for you:

Looking at proof of stake in a vacuum, the stake reward creates decentralized inflation, meaning if everyone stakes, you stay at equilibrium. What PoS is in a nutshell, is a tax on people who don't stake to support the network. Everyone who does stake is unaffected, anyone that doesn't stake is punished. It's not a comparable process to Bernanke throwing money out of a helicopter or anything like that.

Now that the implications of proof of stake in a vacuum are defined, you have to examine it's effects when placed in the real world. Some people argue for a large stake reward, but if the coin is to actually be used as a currency, it's extremely inconvenient for vendors to have to deal with a monetary supply that has enormous percent changes each year. If you used a number like 10%, well, the vendor now has to alter his prices by a large amount on a constant basis.

When you consider the percent of coins destroyed through transaction fees (probably around 1%), and the amount of coins that people will lose per year through accident or death (conservative 1% low ball figure), a stake reward of 2-5% can mostly be ignored by vendors without having to alter prices on a constant basis due to the money supply.