Interesting essay Mal. I have a few comments:
the key cost is bandwidth at $20 per month
This assumes that a forger will have a DSL line dedicated to just the node. I doubt that...... most if not all forgers will use the same DSL or work T1 lines that they use for all other internet communications. Merchants wil already have DSL lines set up for their credit card transactions. Homeowners already have their DSL set up, so a node connection presents no additional bandwidth fees. That lowers your estimate of $300 a year to $60 a year.
Your assumption of "$3/mo" shared bandwidth and so only $60 per year as the total cost of running a node changes the number in my key point from $15K per year to $3K per year without changing my logic. So here is my logic with your number:
Bottom line, if you assume $5 per month to run a node and specify a 2% forging fee per block, each and every newly added node needs to support an additional $3K in sales per year just to break even via a PoT forging reward for running the node.
In reality, I will back off of a $20/mo dedicated DSL line to your number of $3/mo for shared bandwidth when you show me a working every-node-to-every-node PoT algorithm that uses only 20% of a DSL line's bandwidth. Just what IS the bandwidth requirement for a PoT algorithm that's got to communicate to every node once per minute the online status of every other node?
There's only 1440 Crypti blocks to be forged in a day
FOR A COMMERCE BASED CRYPTOCOIN THAT USES FORGING AS A REWARD, THE NUMBER OF NODES MUST BE KEPT IN LOCKSTEP WITH THE INCREASE IN SALES REQUIRED TO SUPPORT IT
But you assume that the only transactions going thru the node for the next year are the Cryptsi Node Reward Program transactions. There will not only be other transactions, but each block can contain 254 transactions. So we ar elimited to 365.000 or so transactions a day. A reward for forging 1 million XCR is 5000XCR.
Today there were three blocks that went thru with 100XCR fees, and one with a 1000XCR fee. Lucky Forger indeed.
Additionally, you are also assuming that XCR will stay the same price relative to the USD as it is today. I doubt that very much, and so do our frequent bloggers.
For a merchant to become a verified merchant, they must apply and pay a 1000XCR fee. Then 10 forgers must verify the merchant. Those 10 forgers earn 100XCR each.
With all due respect, you are comparing apples and oranges here while using smoke and mirrors.
It costs money to put a node on the network: money for a computer, money for electricity, and money for bandwidth. Today none of these can be bought with Crypti, so I have estimated their costs in US Dollars. My original estimate was $300 per year to put a Crypti node on the network. Your SWAG low-bandwidth PoT estimate was $60 per year. That's the cost to start forging, estimated in dollars.
To keep consistent, you've got to estimate the payback from forging in dollars, too. It doesn't matter what the XCR to USD exchange rate is, it doesn't matter what the number of transactions in a day or a block is, it doesn't matter what toy XCR rewards get handed out as party favors before the transition to the true Crypti commerce marketplace. All of these things are useless diversions that add nothing to the discussion or point I am trying to make.
Fact: If the annual dollars earned from forging doesn't equal or exceed the annual expense in dollars for running the node, the forger is not motivated to continue.
Once the dust settles and Crypti is in routine operations mode, all that matters is what volume of commerce the nodes handle on a per block basis, measured in dollars since that's that's the currency unit that bought the forging nodes. And my calculation stands: For a 2% transaction fee, each node must support $15K (my dedicated DSL number) to $3K (your low bandwidth use number) in new commerce. My logic stands for this statement.
Bottom line, letting somebody add a node without also requiring them to add an online shop is destabilizing the network by undermining its reward structure.
The new forger wants a cut of the ongoing effort. This cut has to come from somewhere. It can only come from increased sales that generate increased fees. A forger that does not add an online shop is expecting a vendor to generate the increased sales required to give the forger his expected cut. This makes the forger a parasite, doing something the vendor already did when the vendor added HIS node as part of a new online shop.
This is a logical conclusion. Open your mind to embrace its implications. The key to Crypti success is vendors, not forgers.
Of course, if you were to DROP PoT..
PoT is the backbone of XCR. The team here has been working on the specs for PoT the past few weeks. The current plan calls for it to be the main algo to determine what node forges a block. The other algos are just frosting on the cake, adding a little to the value, but not a lot.
I know you've been working for months on PoT. It didn't work like you thought. It's broken. You're embarrassed. You want redemption, you are calling in outside experts. I get all that. I understand you think PoT ***IS*** Crypti - BUT IT'S NOT. The soul of Crypti is not PoT rewarding of forgers. The soul of Crypti is a focus on commerce and vendors. FOCUS ON COMMERCE AND VENDORS.PoT will not allow a long-time up node to dominate the forging. Each node is given one point for every block it is up, and once it forges a block, the PoT value is reset to 0. That allows the other nodes to in the queue to forge, and prevents a type of attack.
All you are saying here is that my calculations are correct of how many blocks per day a single node will forge in a 100/200/500/750/1000/3000 node network. Embrace their implications.The other value for merchants is the sharing of the transaction fee. Even your wildly estimated cost of $300 a year ($1 a day maybe) can be made up with just one daily earned fee from a $200 sale.
Again, if there were no transaction fees and only vendor nodes as I suggest: (1) the vendors would make exactly the same amount by adjusting their prices upward slightly; (2) there would be no forgers, disappointed or otherwise; and (3) customers would be paying less in a more price-transparent system.