Gridcoin production / supply proposals – discussion

There is an ongoing debate on several Gridcoin network development proposals. Part of the discussion is coin production / supply. Here I would like to gather current proposals in one place to make discussion on this sub topic easier.

Introductory notes.
FIAT money, also gold are in constant production often causing inflation, although some argue (whether it is true or not) that developing economies need constant influx of extra money. On the other hand Bitcoin has a stone set total, final limit of produced coins. Currently gridcoins are produced to reward research and holding of coins. It becomes quickly evident, that we should ask ourselves what is the purpose of coin / token production in Gridcoin network.

Currently national currencies have rather monopolistic position in respective countries. Currency total value is somewhere between 20% to 200% of the national GDP, or very roughly 1:1.

On cryptocurrency forums there is a belief that scarcity brings value. That is not rally true. USD M2 supply is at the moment $13 600 000 000 000. Money supply is just one part of the equation.

Money M2 supply increase in developed countries is between 3% to 15% (China) a year.

I have prepared a rough visualisation of the current Gridcoin economy. As you see, it is mostly a closed circle without any influx of external value. This missing influx could be in form of either paid services / commercial projects or wide adoption, where gridcoins could be considered as money, or maybe something else. But for now it is missing, what means that Gridcoin Network economy is not yet sustainable.

Image: Simplified Gridcoin economy graph.

Current coin supply and production.
There is currently close to 400 million gridcoins. Theoretical goal is for 50 000 to be rewarded for PoR per day and ~ 16300 per day as interest, however, recently only ~ 30 000 are rewarded for PoR per day and ~ 11 000 per day as interest.

Meteor Shower Event
To enhance user base I propose a Meteor Shower Event. Up to 100 000 active researchers, who will achieve X amount of work (RAC, petaflops… this is for further investigation) during lets say the first week of June 2018 would receive 1000 GRC each. This would mean that current coin supply would be enlarged by up to 25% during this one time event. Number of researchers would increase, adoption would greatly increase - around tenfold – also the event would be a great marketing opportunity and a network test. This event is compatible with each proposal listed below.

Rob Halford proposal
Rob Halford recently proposed a Gridcoin development project.
As for gridcoin creation, he proposes:

• Research 50 000 GRC per day ( 60% of each block)

• Neural Network Leases (masternodes) 25 000 GRC per day (30% of each block)
  Rob Halford assumes ROI of approx. 2-3 years depending on participation count. According to my calculations he expects around 50 masternodes (neural networks) to be active. To run a masternode (I think misleading ‘neural network’ term should be dropped for something else) you would need to invest 400 000 GRC for a ‘lease’.

• 1-10% to the Miner who Mined
  (I’m not sure yet how to understand this third part and not included in the table below)

hotbit proposal no 1: SCARCITY
SCARCITY proposal would keep current status quo. With virtually no changes to current amount of rewards (short term at least) it should be easy to agree upon and GRC production would be highly limited. SCARCITY proposal would limit extra supply to under 4% next year and less each consecutive year.

• Research 31 680 per day
• Interest / CBR / masternodes 10 560 per day

hotbit proposal no 2: DYNAMIC
Gridcoin has 4 years and in average 100 million coins were created per year. With relatively low current payouts new users might feel excluded. Relatively high payouts would bring more dynamics to the system and improve distribution, while still deliver bonuses to early adopters. Dynamic proposal would bring 22% next year, ~ 10% after 5 years and less each consecutive year.

• Research 192 000 per day
• Interest / CBR / masternodes 48 000 per day

Other proposals
At the time of the writing I’m not aware of other proposals. Please add them, if any, in the comment section.

EDIT
I found that a few months ago @skcin wrote an excellent article about Gridcoin reward mechanism. I'm in favour of decentralised foundation budget introduction .