March 18, 2019 © Profit Hunters Coin
Topic of discussion:
“Everyone is in hooray mode about ETH going ASIC resistant Curious if BTC or LTC would get the same reaction and the pros and cons of it” — MrGoldy (Discord member)
Does proof of work need to use a memory intensive algorithm to be secure, or the network truly depend on majority hashrate to provide security? This paper explores the options when faced with challenge of ASIC resistance.
I agree, many sleepless nights have been spent wondering about coin prices if mining costs were almost removed from the equation. This would be IF security was not directly related to hash power and indirectly related to power consumption.
Replacing Proof of work with Proof of stake to resist ASIC miners is a lost cause; It still does not address the problem of centralized inflation or in simple terms: “The rich getting richer and the poor getting f*cked.”
PHC is an experiment. It uses a hybrid inflation system, in a controlled supply curve. Our new TEST-NET simulates dynamic ASIC resistance using a hybrid Proof of work, Proof of Stake and a Masternode model with significant changes to the code base.
ASIC Choker, Block Shield, and Dynamic Distribution are key functions developed to control centralized mining issues found in most crypto-currencies today.
The price at the moment is stable even with no use case demand, there appears to be only speculative buying or mining during this phase of development. It could suffer huge price movements (increases or decreases) because CPU mining is significantly cheaper to operate than the current ASIC costs. This TEST-NET fork could be implemented into the MAIN-NET in the future once the risks have been properly evaluated.
The required mining equipment is more widely available, decentralized coin distribution made possible with the ASIC Choker upgrade and could prevent massive amounts of coins getting dumped on the market at one time, simply because centralized supply fluctuations are no longer an issue as with conventional ASIC friendly centralized distribution based upon hash power only. This inherent flaw in Proof of Work block chains have been a long standing struggle for developers and investors.
The price would then begin to reflect a pricing model indirectly related to energy market prices. In my humble opinion; This is new in terms of macro-economics in modern society. In the past, gold and silver maintained a store of value, even if it was inconvenient to exchange. It served a good purpose for money for a long period of time because it was rare and difficult to extract. The production costs of rare bullion and coins are included into the speculative price determined by the supply and demand markets.
Fiat currencies removed the “cost of production” for the money and replaced it with the future liabilities for the debt issued to third-parties.
This is dangerous because they have no base price; Only speculative prices due to uncertainties within the supply or demand chains, and are volatile and vulnerable to negative or positive media attention or market sentiment.
Economists understood this, and so they began to value the fiat currencies to the petroleum industry and later directly to the price per barrel of oil set on the global markets. Undeniably, oil was and still is, at the heart of the global economy. This gave fiat currency a base price it needed to support “somewhat” stable speculative hybrid markets.
This is also dangerous because petroleum is a limited resource, and has devastating effects on the environment. We’re learning from our old mistakes, but have not found something reputable enough to be trusted as much as something already a part of our everyday lives.
Sitting in front of our faces, we do have something reputable, widespread and cheap to operate and acquire. It’s our desktop computers, phones, tablets and even Internet enabled devices with unused CPU cycles. They can become the new oil of our global markets. Their operations secure our confidence in a store of value regardless of speculative forces driving the markets themselves, these machines are everywhere already and we just need to use them more efficiently.
Oil will someday not be the central driving force of economic operations, electrical power consumption will eventually outpace fossil fuels and so currencies will begin to reflect the economics within those marketplaces as well. Price per barrel will become insignificant compare to KW/h.
Bitcoin was an experimental solution, although not perfect; It served as a “living”, working and operating proof of concept. The theory is valid, the implementation needs work, and politics are yet to be decided.
This moment in history brings forth an opportunity for mankind to search for the next method of exchange, store of value, free of any third-party liabilities. A truly decentralized free marketplace, not one without rules, a system WITH rules that are enforced by the network effect of the protocol itself. Node operators vote, when they upgrade or fork, use a different protocol or create their own. This is a positive change within economics. Those who will hold, and gain market share are will no longer the biggest, most influential.., They need to be the best! This does not mean everyone needs to use one blockchain protocol, no! There needs to be many, but many will fork to the code-base with the most upgrades done that will satisfy a proper use case.
PHC aims to become a project; Others will strive to collaborate and help.