It has been a very exciting week for the cryptocurrency world, from the price decline of Bitcoin spurred by the PBOC seeking to prohibit Bitcoin companies from banking to the announcement of Vertcoin implementing a merge mining collaboration with Monocle. And just announced earlier today is Reddcoin’s shift of algorithm to a brand new system called PoSV (proof of stake velocity).
Reddcoin has made a revolutionary move and has created a concept that may be key to their survival against Asic mining hardware, as well as providing its investors an incentive of 5% interest.
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The conversion process has yet to be implemented, nor has the source codes been unveiled for public scrutiny on github. In all aspects, the full explanation of why you should be interested in PoSV or how it works is a very complicated and technical one. The new wallet featuring the POSV algorithm is set to be released tomorrow.
I have taken the main points of the white paper and presented them in a way that is easy to understand from a mostly nontechnical analysis.
What exactly is PoSV, and why should I know about this?
PoSV is an asic resistant algorithm that will protect the coin from being heavily mined and dumped on the exchanges, which will lead to a downward spiral in value. In addition, PoSV encourages the holders of Reddcoin to make active transactions to their wallets (not to each other ) frequently in order to receive 5% interest on their holdings.
Why is this a good thing?
Miners that are currently acquiring Reddcoin, are disheartened in their resolve to support the coin through mining because of its low value of 2 satoshi prior to the new announcement. With Posv, miners need not purchase Asics mining gear in order to keep up and risk facing the equipment expiring due to heavy usage before recouping their ROI.PoSV will make the coin un-mineable, thus removing the threat of ASICS farms in the future.Miners can still ‘mine’ coins through a multi-pool that will mine other coins and pay the miner in reddcoins
I’m not a miner, how does this benefit ME?
If you are a potential investor or one one of the people who purchase shares in the IPO previously,or if you are simply in possession of reddcoin you received as a tip- you will qualify to earn 5% interest by simply keeping your updated Reddcoin wallet open, even if its stored in a crypto exchange you will continue to earn interest! The yet to be released wallet will include the new PoSV algorithm to enable your coins to go through ‘minting’( gaining interest). The more coins you have, the more coins you will mint.
How does minting work, and how will it affect the total number of coins that haven’t been mined?
Minting occurs when a Reddcoin wallet syncs with the Blockchain and verifies transaction. Through constant verification, the network remains more secure and your stake of Reddcoin is authenticated, thus enabling you to receive 5% interest as long as the wallet stays online.
The current total cap of coins is 109 billion, but PoSV in theory will mean there is an infinite supply due to Transaction fees.
PoSV promotes stability to a coin’s economy by reducing the capability for miners to dump the coin on exchanges thus immensely lowering the coin’s value. Reddcoin in their recently released White Paper has claimed that the PoSV systme will be very hard for any other coin to replicate due to the uneven distribution they will experience. Reddcoin was mined for approximately 3 months and has been given the chance to distribute the wealth fairly evenly. Reddcoin promotes itself as being the social currency and many users have received tips from others and the coin has been flowing rather than being hoarded for the most part.
Merged mining may seem like an incentive to some coins, but it poses a threat of the weaker coin being ‘taken over’ by the one of higher value in the long term. PoSV is likely the best system for other coins to take up, though it will be close to impossible to create a system that will be evenly distributed like Reddcoin due to scrypt asics being released this summer.
This revolutionary development marks another notch on Reddcoin’s belt for being innovative and possessing the initiative to make positive alterations to their coin to increase value and further develop the infrastructure and durability of the coin.