Use Grin Coin as a reserve for more Advanced Fair Tokens

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I created 2 topic but 90% of people didn’t understand what I said. Unfortunately the old quality is no longer here. I missed reading a lot of information here in the past.

I want to collect all the things I said and give advice.

I don’t know exactly what Ignotus thinks for Grin’s future, but I feel like something is going the way he never imagined. Of course he predicted that the Grin price would drop, but I don’t think he ever expected it to drop so dramatically. Currently, Grin daily block rewards have dropped below $3000 but still no buyers. It’s very, very sad.

First of all, I think the experiment of fixed block rewards idea is not very fair. It does not protect the first miner or the first investor at all. Then there is no reason to invest in the first place and protect the network. If you do not protect the network, that network will not work. Therefore, as I mentioned on this topic, it is a fairer solution to reduce inflation in the first year without making the first investors/miners rich. Everyone should do this self-critism. We can’t blame Ignotus because this was an untested experiment and he warned us all.

“It’s very young and experimental. Use at your own risk!”

Secondly, I would like to clarify the issue of POS, POW.

The POS side is growing and developing quite a lot. There is a strong side that processes hundreds of thousands of transactions per second, uses very low fees, and has connections to hundreds of dapps. Every day the POW side is dying and the POS side is getting stronger. There is no POW left in the TOP100 that can hold its value expect Bitcoin.
Grin was born in the dead side. Also, actually it hasn’t been born yet. Therefore, after 4-5 years, if a fully decentralized and confidential network with 1 billion transactions per second on the POS side emerges, maybe Grin will never be born.

However, there is a point that 99% cannot see. Only this situation can pave the way for Grin to become the world currency of the future. Let’s explain this. POW generates money in exchange for a certain amount of energy and effort. You don’t need goverment money directly to produce POW. You need a core, internet and electricity.

However the main source of POS is state money. Since you don’t produce the POS with any labor, you buy the POS using government money. This creates a system that automatically derives its value from government money. The value of government money is also a piece of paper, as it is not tied to anything. The connection between the gold produced by hard work and the state money was cut off years ago.
Thus, because POW is produced by labor, it is not directly tied to government money but indirectly. So what do we will do with all this information?

We will go back and copy system monetary policy of goverment money equal to gold. Grin coin can be a reserve, and new tokens can be created from Grin. This tokens can be on POS with more faster more privacy more scability. The only source for creating this tokens are fair and producing real labor Grin.

XEN made simillar system but XEN is tied to other POS tokens as a resource, and POS tokens are directly tied to government money. Also, XEN can burn and can be converted into other tokens. I don’t think the value of something that disappears from the world and burns can be permanent. In my opinion, reserve money should not be burned, but locked up like gold.

As a result, either Ignotus has to come back, or someone who can activate this idea. Grin can’t be used as Ignotus wants with the 60 second block reward and TPS he has. This is not possible. No matter how much you improve it, its privacy, scalability, fairness and speed will lag behind POS. So it makes sense for the labor-produced Grin to be a POS reserve.

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I see no logic in the case you make for PoS. PoS enriches those who hold a coin and is by definition not fair in its distribution.

Exactly, miners knew there is no guarantees on investment and I do not hear them complaining. Besides, most miners Hodl their Grin coins as is evident from the low daily transaction volume for Grin.
Regarding quality, I liked the quality of some your historic post more than XEN and PoS shilling posts you make lately, I think I am not alone in this based on the few reactions😉.

For anyone interested in comparing the “Fairnes” of PoW and PoS, this is a reasonable article on the topic. Read for example Andrew Poelstra’s arguments why PoS history is reversible:

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The system is an interest-free system where Grin is locked as a reserve and new tokens equal to its value are created. No matter how much money you mint, the total value is equal to the Grin you locked. This is the old economic system of states. In other words, all money equal to gold how much you have. The reason why I call it POS is because the network security of the system is provided with locked Grins and it does not waste energy and time for hash calculation. In addition, using Grin as a reserve makes it the main currency. This means it will allow you buy mining devices directly with Grin.

However, the first token cannot be used everywhere. The gaming industry, the internet industry, the media industry and the financial system wants instant payments. This cannot happen in a POW network. Imagine that gold have money value but cannot be used for every payment. However, the other tokens will allow you to use it everywhere.

Ignotus or someone of the same level is required to understanding all what i tell and to establish its mathematics.

This topic is not “shilling pos” for those who understand the whole subject.

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If I stretch my imagination I can imagine a future where CBDC’s would use Bitcoin or Grin as Proof of reserve. But that would be up to a third party to implement. Basically it has little to do with Grin as project or the technology behind Grin since anyone could use it as a reserve and proof so by for example sharing the public keys of wallets holding the reserves.

I do not think Ignotis would care much for such an idea, but I do ofcourse not know his/her/their mind.

For the interested reader the closest thing i could find that represent an opinion or actually just a sharing of information on PoS by @igno.peverell:

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Most implementations of POS enrich holders but that’s not its requirement, it’s just the way most decide to implement it. Distribution is a problem (in theory less so, but so far in practice it’s not great).

I put cryptocurrencies in two groups, one for SoV and the other for everything else (smart contracts etc). Grin is, imo, currently the best candidate (judging by tech, fairness etc) for SoV. For everyday usage (fast payments, smart contract interactions etc) pow is not suitable because of its probabilistic finality. My opinion is that you need instant finality, high throughput and low block time for this. There is no way grin is gonna get this (complicated, risky, unnecessary imo), so I hope it stays the same and becomes the most fair store of value (used or not, that’s on humanity as a whole to decide). I don’t see why grin can’t stay the same as it is.

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Maybe, due to unique monetary policy that I still stay with Grin, otherwise, I’ll convert my bag to Beam or zCash, Monero…

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What makes you think Grin having a different emission would have benefited the current price? Look at the most comparable MW project( Beam), they had a fast emission in the first year, then 4 year halving’s akin to Bitcoin. They also have ITX, payment channels( lightning), better privacy, DeFi/ smart contracts/ Swaps/ Dex etc( all the things ppl said Grin should have). Yet their daily block reward value is less than Grin’s. It’s quite sad tbh.

How would moving Grin to PoS increase TPS, privacy and scalability? Or are you suggesting some off-chain PoS version of Grin? What sort of design are you proposing?

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Grin is one of the last fair mineable coin. Please do not even mention PoS along with Grin.
Do you see how stable the hashrate is? Even after loosin half of the “market value”.

Someday Grin could be the Pennies of the Bitcoin.

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Such a division makes sense. For me, I kind of have a third group dedicated to digital cash since I consider this a special and important use case. Grin is in my opinion a good candidate for digital cash since a) with small volumes finality can be assumed in one block/1 minute which is reasonably fast and with Lightening instantaneously and more scalable, b) it privacy preserving properties, c) its fair(er) distribution, d) its long term security and good properties as SoV, d) minimal, scalable and portable blockchain and e) the linear emission might create a semi stable-coin effect with relatively stable value.

In summary, for me Grin checks the boxes for both being sound money / digital cash and checks the boxes for being a good SoV :white_check_mark: :white_check_mark:.

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  1. Mathematically it should drop less because inflation is falling faster
  2. The psychological effect is too much. If it were said like this; we won’t make the initial miners and investors rich, but we will protect them with the block rewards falling each month during 1 year.

Beam is a different example. The project mission is very different. So instead of comparing it with other coins, we should try to self-criticize and give better ideas about the Grin experiment. I m sure Ignotus would agree me.

There are 2 options.

  1. Grin sets up a second POS network and get coins from POW Grin. For this, Ignotus and the first founding team must be completely here. The goal is to be able to reach 10,000 TPS per second and connect to all dapps without waiting for hash generation. Currently, they can do this in 1 year by developing the Polygon infrastructure.
  2. Second method is creating Grin on other networks, with a smart contract, by showing collateral on the Grin network. For example, eGrin token on Ethereum network, bGrin token on Binance network. The contract locks your money on the Grin POW network with a password, and gives you the Grin token on the network you want. Then you use that token in every direction on the network. Since your entrance and exit will be from the confidential and fair Grin network, the reason for preference will be high.
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  1. That’s only true if supply and demand remain constant. Changing the emission could negatively impact demand, because, Grin could no longer be considered immutable and would then be more comparable to all the shit coins we try differentiate from. Grin would also become less predictable, because, it opens up the possibility of more monetary changes in the future. Overall this could be very damaging to Grin’s brand.

  2. That’s all in the past now. If a large percent of supply was emitted to miners in the first year, then that could have helped better boot strap the network. However, because that didn’t happen, it now becomes more appealing to mine Grin vs other coins with a fast emission, since block rewards now are still equal to block rewards from Day 0. The same applies to anyone who considers mining Grin in the future.

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I know that this is a fact that cannot be changed anymore. But we must do this self-criticism and admit the error to give a better idea of the future. In the first 4.5 years, everyone’s money was burned for the operation and protection of the Grin network. Some got the G1 mini for $1000, G1 for 25.000$. G1 mini is $300 right now. Some bought Grin for 4-5$, now it’s 0.036$.

Logic is this, it’s not fair if Grin’s later taker is luckier than the first one. Therefore, a mechanism to protect the first investor and the miner, should be developed. Even if you don’t make them rich, you have to protect them.

A question in language everyone can understand: After today, if you hear of a cryptocurrency with the same monetary policy as Grin, would you invest for the first 4 years? If the answer is no, this indicates the inaccuracy of the system.

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Mining is an atomic payment for work. Much like we get paid monthly salary. As soon as you prove work has been done, you receive your payment. The process we call mining says nothing about the future value of the asset in which payment is received. You can think of it as a “just in time” exchange of fiat to crypto through the electricity bill. The network doesn’t owe a future price increase to the miners after it paid for the work, just like the company you work for doesn’t promise your USD will increase in price after you get your salary. It’s the same “do work → get paid” mechanism, people just got too used to speculating on the future value because of the deflationary nature of most projects.

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Who pays the miner? Each time you make a payment, the value you receive decreases with high inflation. In this case, conscious people should not pay. If payment is not made, the network will not work.

It looks like this, I will start a business with your money but after the job is ready I’ll sell the business cheaper to new investors.

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The network pays whoever proves the work. If the miners sell the coins after they get paid, the coins don’t lose much value due to inflation (yearly inflation is at 22% right now). They’re free to speculate if they want to and hodl though.

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With a ~22% annual inflation, the daily inflation is ~0.06%. Since a miner’s reward is only locked for 24hrs, that’s the only inflation they’re forced to endure by the network. That’s practically nothing. If a miner chooses to hold for more than 24hrs, that would be a speculative action that will have to endure more inflation.

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I’d like to share a bit from my opinons, crypto price is not really decided by inflation but by market makers/whales or by real demands.
An easy example are is doge coin (or shiba/pepe…) total supply is trillions and unlimited emission. However, it still got higher price comparing to grin.
I see our current problem is lack of dev resources and marketing strategies to re-gain old grinners and get new comers.
I also found that anyone of us can be a marketer like me by going around twitter, talking about grin, build some small projects that related to grin which also monetize itself.

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The emission function is completely different though, doge emitted vast majority of coins very early, so today’s inflation is low and holding coins is not that punishable (even if it has tail emission). I agree with the rest.

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I don’t talk about now. I talk about how it start.
You can check this graph.

Since Grin came out years after Bitcoin, it was clear that there would be speculation on it. This speculation has wreaked havoc with high inflation. If Ignotus had shown a simple intention to break first-years inflation, Grin may not have had such drop effect.

While Bitcoin rise aggressively on the upside, Grin drop aggressively on the downside. Both are unbalanced. No one can defend this. Anyway if Igno read this now, I feel Igno agrees with that because it was experiment and no one would know the outcome.

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I think Igno would kindly remind us that we’re less than half a decade in our journey. I wouldn’t change the supply function even if we were able to go back in time. The interesting thing about this experiment is that because of its hard start, not very many projects will try it. It takes time to bootstrap a fair time-based currency, there are no shortcuts. But this design comes with a stronger first mover advantage than the hardcap supply design because it’s impossible for a project that came after to catch up with the supply. The supply function counts the seconds passed since the genesis block so it’s effectively a clock. As a consequence, Grin will always have the first mover advantage among the time-based currency experiments.

Bitcoiners like to say “There is no second best.”. That’s kind of true for time-based currencies in a very unique way. It’s impossible to outrun the clock that starts first.

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