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Message: <blockquote data-quote="notimp" data-source="post: 9281270" data-attributes="member: 101990">Yes, so the thing you are selling is 'distributed ledger', thats the innovation. For that to happen, you need distributed computing power for transaction verification. So you say - people who verify transactions, 'can pay themselves' by generating currency.RATE of currency generation is FIXED by the algorithm. (So only disrupted by 'innovation' (so only offset by computing power getting cheaper f.e.). And fixed in a way, that you generate less and less coin as time goes on (presuming it also has become more valuable as more people bought in). But again, rate is fixed. (== No inflation spikes of amount of currency.)(Theoretical problem - mining may become not lucrative anymore, at which point you have no transaction verification. So at that point you do a 'stage illusion' like bitcoin already did - get a large amount of asset owners together, fork the protocol to make 'verification per cpu cycle' easier. Call the new thing bitcoin again - and most of the people are happy again.)How do you get the rate to be fixed? Only a small part of computation power is used for transaction verification, the much larger part of the power is used to solve a mathematical equation, with only one solution as 'proof of work' - whoever gets to the solution FIRST, gets to generate currency (and verify a bunch of transactions). Your algorithm baked into the currency makes sure the mathematical problem gets much harder over time.The algorithm is backed into the 'currency protocol' that is distributed, so it cant be changed. (Unless you fork currency.)Who makes sure people dont cheat? Basically a consensus of 'enough other people on the verification backend' which also ensures, that all transactions must be transparent.Also you change the people 'confirming transaction' all the time (ideally), so no single person has to be trusted.(So most of your innovation is: You standing on a stage shout: "Whats 14x7?" First person raising their hand gets to be the treasurer of your 'club' for 15 minutes. As they cant find out who the next treasurer will be - scheming how to collude to defraud people, becomes harder, also you might want to do a good job, because you get paid in currency. Which means, you dont need a central instance you can trust. In principal.In practice - computational cots dictate how many transactions per second you can 'pull'. So how useful your currency is as a currency. Also the ledger (sheet of paper with owes vs has of everyone to everyone ) becomes bigger. Also the more people group together in 'verification clubs' buying better hardware, the higher their probability is to actually get to deal with the next transaction in their hub, which allows for certain schemes. Also if you coordinate buying and selling and or generation of money you can drive pump and dump schemes.Mining profits are a factor of supply and demand with only limited transaction capacity at a time (Fee is negotiable).edit: Miners are first motivated by 'mined coin mostly', and later more and more by transaction fees (less opportunity to get 'shares of the company'). Maybe. At least in theory. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite2" alt=";)" title="wink    ;)" loading="lazy" data-shortname=";)" /> Thats kind of how startups work in the tech sector.. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite2" alt=";)" title="wink    ;)" loading="lazy" data-shortname=";)" /></blockquote>

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