Block Subsidies - New halvings or not?

[marpme]

Block subsidies

Many proposals are coming up at this very moment for proper consolidation and consideration, we want to gather all ideas and maybe one proper solution within this thread.

Problem:

We have the following solution to support the idea of a healthy monetary network to find and develop more ideas to create a living economy. We want to keep our miners running and support them at their jobs thus we just don't want to stop the rewards by May 2020, thus we want to give them the chance to keep their services running until we found a proper solution for our problems.

State of the art:

0 -> 14000
    Reward Per Block: 200000
14000 -> 28000
    Reward Per Block: 100000
28000 -> 42000
    Reward Per Block: 50000
42000 -> 210000
    Reward Per Block: 25000
210000 -> 378000
    Reward Per Block: 12500
378000 -> 546000
    Reward Per Block: 6250
546000 -> 714000
    Reward Per Block: 3125
714000 -> 2124000
    Reward Per Block: 1560
2124000 -> 4248000
    Reward Per Block: 730

Implementation Proposal:

0 -> 14000
    Reward Per Block: 200000
14000 -> 28000
    Reward Per Block: 100000
28000 -> 42000
    Reward Per Block: 50000
42000 -> 210000
    Reward Per Block: 25000
210000 -> 378000
    Reward Per Block: 12500
378000 -> 546000
    Reward Per Block: 6250
546000 -> 714000
    Reward Per Block: 3125
714000 -> 2124000
    Reward Per Block: 1560
- 2124000 -> 4248000
+ 2124000 -> 3528000
    Reward Per Block: 730
+ 1st 1051200 (~= 1 year of verge blocks assuming 30secs per block)
+  Reward per block: 256 
+ next 1051200 
+  Reward per block: 128
+ next 1051200
+  Reward per block: 64
... and further until the 7th year is reached

or the real implementation as of right now:

https://github.com/vergecurrency/VERGE/blob/d7f6546c298fbcbc4130f5e147bb58093cbc0d8a/src/validation.cpp#L1202-L1218

Proposals:

The ideas would be the following: (14 years plan)

The ideas would be the following: (7 years plan)

Implications of keeping it as is:

• Miners would stay "nearly" (living by the fees) unpaid, setting a high pressure on many sides
• unknown economical implications
• Transactions fees must raise in favor of the mining process

[karanpatel863]

The proposed schedule seems good for near term. Does this mean that exploration of various consensus algorithms has been put to end?

[marpme]

The proposed schedule seems good for near term. Does this mean that exploration of various consensus algorithms has been put to end?

No, it hasn't been put to an end, but we definitely need more time in order to get this researched/implemented, thus we want to make sure to not run out of steam in the meantime.

We are actively developing a lot of stuff, thus we have to prioritize things in a working manner. And privacy and consensus algorithms share a fair place together, but as we started the v5 codebase it makes sense to also directly continue with ring-sigs and further topics, thus we want to raise the subsidy timespans a bit more in order to finish the rest first. At this point, we just have a lack of manpower for doing everything simultaneously.

[ChillingSilence]

Rather than a jarring halving, why not adopt the "1% let month reduction" that DigiByte had. It makes for a much smoother supply curve and there's no immediate "Must be worth X to continue supply at Y hashrate" because it goes up and down a little with MultiAlgo, and, being 1% less per-month is surprisingly efficient.

Just a thought that may also be worth considering 🙂

[justinvforvendetta]

@karanpatel863 definitely not, but it would be nice to not feel time constrained while looking into all of the algorithm options we have on the table.

[karanpatel863]

@marpme @justinvforvendetta IMO, we should ask miner community and ask their opinion first as they will be one affected by this change Non-miners wouldn't notice a thing after change. Generally as a rule of halving, price corresponds to price as a result of halving due to which miners are incentivised but that always works if the halving model was stable from the beginning i.e pre-set from the genesis block. This manual change could prove costly to us due to various reasons like "MINER UNDERPAY" etc. So, why dont we ask miner communities first by contacting pools so they can make proposal announcement

[karanpatel863]

Bcoz if miners wont agree to this they might abandon verge network due to which Verge network could face security issues. If this happens you would have to change the consensus algo sooner than later due to security issues.

[marpme]

I mean this will start within in September 2019, hence they have a lot time left to disagree with the plan. It’s not like that we push it now and then it’s active immediately.

And we already gathered an overall wish within the community and that is to add new halving cycles

[karanpatel863]

I agree that it starts from September 2019 but the agreement you got are from mixed people on twitter which mean not every voter is a miner. How about we tag all the pools in a separate tweet so that it will come to their attention incase they were unaware about this

On Sat, 11 May 2019, 11:15 marpme, notifications@github.com wrote:

I mean this will start within in September 2019, hence they have a lot time left to disagree with the plan. It’s not like that we push it now and then it’s active immediately.

And we already gathered an overall wish within the community and that is to add new halving cycles

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[marpme]

Not the miners decide about life or death of Verge but the network itself. When all client switch but only the miners stay, well then they get rejected blocks. That’s how it works.

So and this change is already in favor of the miners, otherwise they would run out of steam by May 2020, that’s a fact.

[karanpatel863]

That's not true. The role of miners is to secure the network and process every txs that happen in PoW blockchain. The more miners agree with proposed change the more security a chain has. One can't ignore the fact that they actually contribute in life OR death of a blockchain. w/o enough miners one would've have to face security risks. Anyhoo coming to your second point, if they agree with proposed schedule change then it's better as we have nothing to worry about. I just wanted you guys to let them know through tagging pools. Please note that I am NOT against this change.

On Sat, 11 May 2019, 12:17 marpme, notifications@github.com wrote:

Not the miners decide about life or death of Verge but the network itself. When all client switch but only the miners stay, well then they get rejected blocks. That’s how it works.

So and this change is already in favor of the miners, otherwise they would run out of steam by May 2020, that’s a fact.

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[karanpatel863]

they are NOT going to change at their will. If enough people gets on board with the proposed schedule change, they'll go with it.

But IMO miners opinion's should matter as they play one of the MOST important part in network to secure the network and process txs. I believe not all miners are on Twitter to conduct a vote. I propose to contact the respective pools to let them know about this proposal.

On Sat, 11 May 2019, 12:52 standarduseraccount, notifications@github.com wrote:

Guys, I know you're great at code, but this is an economics question. This changes the incentives after people already sunk their time and money into it. marpme is not right at all on this and is defending something he is naive about, it appears. What would you do if your boss cut your pay in half? Sunerok wrote these rules five years ago and they aren't changing after a Twitter poll. This is actually really bad for its image.

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[justinvforvendetta]

this is why there is a public poll. think about how naive it would be to let pow end next year. I dont think any miner would want that. please dont forget I used to run a mining pool and was a full time miner before I created this lol

[justinvforvendetta]

miners didnt complain when we added new algos. I dont think they will complain about giving them more time to mine verge.

[marpme]

@justinvforvendetta I think the same way. It'll damage Verge network waaaaaay more if we just run out rewards by next year. There would be literally zero rewards for keeping the machines mining at Verge, thus network security would crash even more compared to the scenario that we just lower the mining rewards by ~65% and keeping the rewards alive for the next 7 year. That way we are also able to find new ways, more efficient ways, to verify blocks on the network.

[marpme]

Additionally to those problems discussed beforehand. After introducing additional halvings the final drop of rewards wouldn't be that huge anymore as we will finally near the rewards to our mining fees (step by step) instead of suddenly drop everything.

That would bring us to those two situations when rewards get removed after all coins are being minted:

730 XVG => to nothing but only mining fees (assuming 5 tx per block ~ 0.5 XVG)

- compared to -

4 XVG => to nothing but only mining fees (assuming 5 tx per block ~ 0.5 XVG)

[karanpatel863]

Additionally to those problems discussed beforehand. After introducing additional halvings the final drop of rewards wouldn't be that huge anymore as we will finally near the rewards to our mining fees (step by step) instead of suddenly drop everything.

That would bring us to those two situations when rewards get removed after all coins are being minted:

730 XVG => to nothing but only mining fees (assuming 5 tx per block ~ 0.5 XVG)

- compared to -

4 XVG => to nothing but only mining fees (assuming 5 tx per block ~ 0.5 XVG)

Interesting. So, at this point you guys are looking forward to 7yr schedule right?

On Sat, 11 May 2019, 14:12 marpme, notifications@github.com wrote:

Additionally to those problems discussed beforehand. After introducing additional halvings the final drop of rewards wouldn't be that huge anymore as we will finally near the rewards to our mining fees (step by step) instead of suddenly drop everything.

That would bring us to those two situations when rewards get removed after all coins are being minted:

730 XVG => to nothing but only mining fees (assuming 5 tx per block ~ 0.5 XVG)

- compared to -

4 XVG => to nothing but only mining fees (assuming 5 tx per block ~ 0.5 XVG)

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[justinvforvendetta]

@standarduseraccount hundreds have voted so far. no one uses bitcointalk anymore. alot of our original users have voted on twitter already. its a great platform. you are one person, and luckily we are deciding this, again, with the entire community. so far, most people overwhelmingly want pow. as a miner myself, and having alot of experience with it, and being a verge fan, i think most people will want to extend POW, and so far it looks as though i am right. thank you for your input though.

[pcp1985]

Hi Team

We should get an opinion of an economist who understand Crypto market as well. Sooner or later with extending halving as well we will face same dilemma in near future. By the way, it's like we are digging a bigger hole near by to fill the current small hole we got.

I have some more opinion but am restricting as its an open forum.

Warm regards Pratheesh PC

On Sat, May 11, 2019, 22:32 sunerok notifications@github.com wrote:

@standarduseraccount https://github.com/standarduseraccount hundreds have voted so far. no one uses bitcointalk anymore. alot of our original users have voted on twitter already. its a great platform. you are one person, and luckily we are deciding this, again, with the entire community. so far, most people overwhelmingly want pow. as a miner myself, and having alot of experience with it, and being a verge fan, i think most people will want to extend POW, and so far it looks as though i am right. thank you for your input though.

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[justinvforvendetta]

@standarduseraccount where are your credentials? also, of course i care. you are being selfish. i am saying it is up the community, you are saying it should be up to you. LOL get a grip. @pcp1985 no, we will not face the same situation in the near future, as this would give us several years of room, and we would analyze the options starting immediately anyway.

[justinvforvendetta]

@standarduseraccount ok. i get it. you have one vote for no. did you vote no on the poll? please do, thanks.

[karanpatel863]

This discussion was supposed to be civil. Please dont ruin it guys. If you have an explanation, do provide it but staying within civil standards of an ethical conversation

On Sat, 11 May 2019, 15:47 sunerok, notifications@github.com wrote:

@standarduseraccount https://github.com/standarduseraccount ok. i get it. you have one vote for no. did you vote no on the poll? please do, thanks.

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[justinvforvendetta]

@karanpatel863 agreed, and on that note, no one should reply here more than once. people can say yes or no, and their reasoning. thats all we need.

[marpme]

@standarduseraccount False, the schedule has already been destroyed when we switched down to 730 and even before that. According to the "standard" cycle, which doesn't exist by design, we should now have 781 XVG per block. And also those 781XVG per block doesn't make any sense at all as we are talking about different time spans between each halving.

See this table:

Blocks between halving	Rewards/Block	Correct Halvings
14.000	200.000	200.000
14.000	100.000	100.000
14.000	50.000	50.000
168.000	25.000	25.000
168.000	12.500	12.500
168.000	6.250	6.250
168.000	3.125	3.125
1.410.000	1.560	1.563
1.404.000	730	781

We never had a proper solution/timing for running out of cycles or handling them overall and I can also ensure that it was never planned to be like this. See the different block spans between each halving. And still, we just divided the reward by half.

My proposals are there for solving exactly this very problem you mentioned. Giving people who are invested right now and also those who are verifying the blocks to get a clear understanding of how the future of verge looks like. Rather than "abandoning" it next year.

[cashaccount]

Hypocrisy, Justin. A community project where one person decides how people communicate.

[justinvforvendetta]

@standarduseraccount we understand your vote is no. there is no need for you to continue, we know your opinion. you are but one of many verge users, and we will get a better feel of the ENTIRE COMMUNITY sentiment within a few days. thanks for your valuable input.

[marpme]

Okay, I will enter your path then. So then, please tell me please what are the scenarios that could actually happen after we let the subsidy drop to zero?

I'm interested in how you imagine the scenario to be after nobody receives any rewards anymore. Currently, we have around ~ 1000 TX per day with at least a fee of 0.1 XVG attached to each of them. That would make <0.035 XVG per Block for the miners who successfully mines the block.

Overall, you were talking about that miners are an integral part of each and every POW currency. So how would an economist explain a situation like this to a miner after May 2020?

Until now you shall continue to mine our chain, but your reward will be cut to zero% cause it was the idea in 2014, now deal with it.

You should have calculated with this event?

[justinvforvendetta]

ok, so please vote "keep halving" on twitter poll. thanks for your input.

[karanpatel863]

Just a quick question, which schedule are you guys looking forward to? 7yr one or the other one?

[marpme]

We are rather talking about a 7-year-plan, which ensures that we have enough time to also develop a lot of things around Verge instead of having a high time pressure to come up with the best solution for Verge and its community.

[karanpatel863]

@marpme thanks for the reply

On Sun, 12 May 2019, 15:40 marpme, notifications@github.com wrote:

We are rather talking about a 7-year-plan, which ensures that we have enough time to also develop a lot of things around Verge instead of having a high time pressure to come up with the best solution for Verge and its community.

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[marpme]

@standarduseraccount I see the problem in the long term run for miners and each and every validation node. Currently, it is sustainable but at a certain point, we have to think about a way of keeping the currency running after dropping the emissions. That's why we need more time to prepare/think about everything.

Verge for me is not only about privacy, but moreover about having privacy within a sustainable, low fee and environmental healthy currency, which is by design built for everyday usage, offering high usability for its users, low transaction cost/time and enables high privacy and security standards.

My point of view is definitely against PoW in the long run, it's neither sustainable for the currency nor for the environment. As soon as we run out of rewards I would like to have a plan to switch away from POW. Thus we can finally get rid of the rewards and enabling the money flow without any doubts of dropping hash rates, dropping nodes, etc.

My wishes:

• After rewards dropped
  • drop PoW as a predecessor
  • enable a sustainable validation, which is
  • with low environmental impact
  • reliable at low cost (100% paid by fees)
  • 0 coin emissions

This is my personal view and doesn't represent Verge's view, which should be mainly about the community's view.

[justinvforvendetta]

@marpme i also share the same view/opinion on the matter.

[justinvforvendetta]

all miners are already aware that verge pow will end eventually. i dont think most of them plan on still mining empty blocks for tx fees. especially because they were getting a large number of coins and then suddenly less than 1 coin per block. you should know, being an economist, that is far too sharp of a decline. i think ending pow now (within a year) would be wayyyyyy too soon. adding sha256 isnt a terrible idea, but lets be honest, farms would control that algorithm in its entirety. its not like myr groestl where gpu farms and gpus could split rewards. people with an old asic would probably get no coins at all, where as farms would get all of them that that algo produced. i dont believe it would be hard to get people to accept a pos system, so long as it was fair (very low rewards, and frequent, but proceeding with that that has yet to be determined by the community anyway)

[justinvforvendetta]

it is a risk and maybe you do not understand the difference between bitcoins pow running out in 2140 and verge's running out next year. the amount of coins before 0 is the difference. bitcoins pow emissions halve and the remainder is still a large number, in comparison to the previous. it is much smoother emission schedule. verge's pow emission is not a similar picture at all.

Vercingetorix, thank you for your valuable input. theres no need to continue spamming this thread. please make sure you vote, and we will of course follow the communitys wishes. (you still have a whole 4 days)

https://twitter.com/marpme_/status/1126899901701529600

[RAMBORG]

Please don't switch to POS!

[justinvforvendetta]

@RAMBORG if we did, it wouldnt be until the pow ran out. this issue is about extending proof of work so it doesnt run out next year ;]

[Desolatorbtc]

The majority of the miners do mining for financial incentives. The big mining farms even switch between different coins frequently to increase their income. If in one year the block rewards end, they will have 0 financial incentive to keep mining blocks with only transaction fees at these price levels. So the halving schedule must be changed to prolong the financially incentivized POW model Verge has.

[Desolatorbtc]

At 2017 and 2018 price levels it was very affordable. At 2020 price levels it will be very affordable again and I intend to mine, assuming they don't mess things up right now.

For miners, it is best to keep the halving as it is now. After the block rewards end, they will move to another coin with block rewards. It is the best financial outcome for them. It is not profitable to mine only for tx fees. On the other hand, for the Verge POW network security it cannot end next year. Therefore it is logical to change the halving schedule.

[justinvforvendetta]

@Desolatorbtc I agree. I think that's obvious. as much as everyone would love all crypto coins to never change, every single one of them must. why? because a) they are software. software always has bugs and exploits. all software. not some. b) this is a new field, and we dont have much history to work with.

for verge, I believe it would be suicide to end pow next year. saying 2020 it will be profitable, is saying you are psychic and I simply dont believe that. also verge was not profitable in 2017 to mine EMPTY blocks. at 27 cents a coin, each block would have been worth a few cents. if you think that would have been profitable for miners, you are naive. like I said, go vote. we understand your opinion. you constantly replying here with your idea, is still not even counting in the poll. make your voice heard by voting on Twitter. if you respond here again with slander or shitposting, I'll just block you from the repo. if you dont like our decision you are always free to sell your bag.

[justinvforvendetta]

btw, the pools I have spoke with support longer pow. one expressed they would have to leave verge if we had no block rewards other than 1 coin, and I completely understand. theyd be crazy to stay. @tpruvot @HashUnlimited any comments on our suggested pow revamp?

[justinvforvendetta]

you just said yourself we will lose solo miners. also you explained immediately after, why we would also lose pools. gg wp.

[justinvforvendetta]

heres the thing. you dont get to tell payment processors they need to change their business model and also start mining in order for one of their options to function. its cheaper for them to just remove verge. also, who wants to use a coin who's chain only moves when a payment processor is using it?

[justinvforvendetta]

what I am asking you, is how will the chain move?

[justinvforvendetta]

ok first, businesses (crypto payment processing) mining (because they have to) is a fantasy that you created, that may or may not happen. (personally i dont believe it will, but for the sake of argument, it is still only a "maybe". i think they would just choose other currencies to support, instead of make more investments and more work to process payments for one particular currency)

also, its definitely safe to assume that the hashpower will be much lower than it is now by several magnitudes. how will we keep the chain secure from people with much larger hashpower? example/fact: if 90% of the miners left bitcoin today, the chain would be exploited by tomorrow.

also, "The right amount of hashpower happens at the right time to make it efficient, like the memory is sorted the right way to make it efficient when defragmenting."

i dont even know what that means.

[SwenVanZanten]

@standarduseraccount What is it you fear for so much when these changes are implemented and active? The fact that Verge changed course somewhere? Or are you afraid miners don't pay attention to this change and realize they don't want that and you fought for them? Or perhaps you want to be a miner at a certain point and don't want any subsidies or if you do you want as much as you can up on till now?

I don't understand what your motives are for thinking this change is a no go. And I don't like your attitude... tone it down a bit perhaps so we can have a less hostile conversation.

[justinvforvendetta]

well verge is an open source software currency, not a company to be invested in.

[XVGHypeMan]

1 - I dont consider 'miners' a static group, many miners change coins\algos on a daily basis and 'follow the money'. Miners that are loyal to Verge should be retired by now and stay on the chain regardless of payout if they are that OG.

2 - If you divide the Verge max supply of 16.5 billion by the approx. amount left, you get around 33 slices of pie - half a billion each . . theres only one slice left . . with some serious market appreciation that everyone expects for all of crypto in the next few years, the value of the proposed payout extension could easily still prove worthwhile.

3 - Either of the 2 proposals (7 or 14 year plans) should give more than enough time for new tech to come out which can be adopted which will secure the chain for years to come.

[justinvforvendetta]

@standarduseraccount "And yes, I really want to mine much more after 2020 specifically because of the original reward plan. I wouldn't have a very good reason to without it."

so you mean you want to mine and receive nothing for it? interesting. i dont think most people feel the same. by most people, i mean about 99% of all people.

[xvgPedro]

@standarduseraccount I've been following this discussion and all I can get from what you're saying is that this change will prejudice miners who made a big investment on asic hardware recently and based their ROI on Verge block reward on a short time frame (1-2 years). Verge community project is much bigger than this. More halvings are needed if Verge project is to continue. In my opinion this is the best proposal we can get until a new model arises.

[ChillingSilence]

@standarduseraccount your feedback has been duly noted, thank you for your contributions.