I believe that the downside of PoW can be greatly reduced by having the emission be purely linear (fixing the block subsidy). Taking 20 years to reduce the yearly supply inflation to 5% will strongly discourage speculation and keep the price low, in turn limiting miner energy use. It would encourage use as an actual means of exchange / currency.
I would argue that proof-of-work and proof-of-stake converge to the same thing, at the limit.
In the proof-of-work model, a few folks make a lot of money (either by being in the right forum in 2009, rugging a community or lord forbid by actually doing something productive for society). These folks then go and buy shares in a mining pool using the PoW coin. These shares are basically the same as staked coins. They can go back and un-stake them at any time by selling. As owners of the pool, their largesse grows as transactions are validating and block reward accrues conceptually to them.
This is conceptually identical to a proof-of-stake system where a few folks make a lot of money (either by being in the right forum in 2013, rugging a community, participating in a presale, or lord forbid, doing something useful for society). These folks then stake their tokens. As stakers, their largesse grows as transactions are validated and staking reward accrues to them.
Good point with the subjectivity of PoS. But regarding the linear emissions proposal, do you have any source that addresses the economic consequences of this model?
Within 50 years of linear emission, the supply inflation will be what fiat is targetting (2%). It will keep lowering after that and behave more like gold.
I get the idea, I was just wondering if someone had written something about the projected wider societal impact of such a scheme.
But maybe that misses the point: I have a firm belief that crypto currencies in one form or another is the future of money. History is too fraught with hyperinflation for it to not happen. The crypto currency that wins, though, will be the one that's in highest demand, not the one that's serves some abstract societal goals. So maybe the relevant question is: would linear emission be more attractive for its holders than e.g. Bitcoin's emission scheme with halvings of the inflation rate every four years?
I don't think crypto is the future of money. But I do see linear emission to be more attractive for all future generations, as it maximizes the emission in their lifetime, and doesn't make them feel like fighting for breadcrumbs from the earlier generations.
1) It's not a fair coin distribution mechanism. A coin that launches with PoS has the creators holding the entire supply.
2) It's not objective. Resolving long range attacks requires social consensus on what is the correct chain (https://academy.binance.com/en/glossary/weak-subjectivity)
3) It's much more complex.
I believe that the downside of PoW can be greatly reduced by having the emission be purely linear (fixing the block subsidy). Taking 20 years to reduce the yearly supply inflation to 5% will strongly discourage speculation and keep the price low, in turn limiting miner energy use. It would encourage use as an actual means of exchange / currency.
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