About Siacoins calculation and supply
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Another side note:
My analysis in my last side note has been proved to be correct by the market. Right now the Sia’s market cap is about 2.9 times of Storj. It had taken the market long time to discover and adjust that. We can see that the market eventually is efficient and will find the right value and price for the assets in the market. But it also takes time for the market to discover and absorb the information.
As we know that a free market is always an efficient market, that means, in comparison of each product in the market, the better products always should have higher market value. Even if for some reasons, this equilibrium(efficiency) is broken for some products (the better products don’t get the higher market value comparing to other products), the market will discover it and adjust it eventually and the equilibrium will be reached sooner or later. Actually the trading opportunity will emerge whenever there is an inequilibrium or inefficiency in the market.
I would like to do one more analysis on Sia’s market cap because I think the market cap ranking on coinmarketcap.com is a good tool to analyze the crypto-coins. On coimarketcap.com, Sia currently is at the 14th place. Let’s take a look at all the 13 crypto-coins above Sia. Based on all criterions you can come up with, for example dev team, business model, technology, development stage, the chance to be commercialized, growth opportunity, the market perspective, the maturity and security and stability of the products and so on, for all the 13 coins above Sia, which ones do you think they are supposed and definitely deserved to have higher marketcaps than Sia? Whence you pick up those coins which you think are definitely better than Sia at this moment and put them in front of Sia, you will discover your true place for Sia. Everyone might have a different place for Sia. But that is the place the market eventually will move Sia to if you are correct.
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Added a new note:
In v1.2.0, Sia will implement a host Proof of Burn mechanism in which hosts have to burn certain siacoins to show that they are real and sincere for business to counter the sybil attack. When Sia network is getting mature, the estimate annual burned siacoins can be 0.1% to 0.5% of total available siacoins. The burned siacoins will offset the inflation in the long run. At some point, it could result in a deflation of siacoins.
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@tobo said in About Siacoins calculation and supply:
Added a new note:
In v1.2.0, Sia will implement a host Proof of Burn mechanism in which hosts have to burn certain siacoins to show that they are real and sincere for business to counter the sybil attack. When Sia network is getting mature, the estimate annual burned siacoins can be 0.1% to 0.5% of total available siacoins. The burned siacoins will offset the inflation in the long run. At some point, it could result in a deflation of siacoins.
As we're a hosting provider, we'd be offering Storage and keep the Siacoins we earn for some time. Does the "Proof of Burn" mechanism warn us or will it just empty our entire wallet or just 0.1%-0.5% of the total balance per year?
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@Guardoo said in About Siacoins calculation and supply:
As we're a hosting provider, we'd be offering Storage and keep the Siacoins we earn for some time. Does the "Proof of Burn" mechanism warn us or will it just empty our entire wallet or just 0.1%-0.5% of the total balance per year?
Proof-of-Burn will actually be entirely opt-in. You won't burn any coins without configuring it explicitly, and certainly it wouldn't do anything like burn a percentage of your total balance. (well, if you opt-out entirely nobody will use your host. But at the very least you will have full control over the exact amount of burn, and full visibility into how many coins total have been burned)
PoB is something that we're going to be evolving slowly, but definitely also something that we're going to be careful about. Burning 1% of your revenue is obviously a drain on your profits, and we care about optimizing host profitability (as it will make the overall network more competitive).
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This post is deleted!
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Hey sorry to bring up an old post, but I think it's still very relevant, and I see it being referenced quite a bit around the Sia market inflation discussion.
I was just curious about some of the math you have.
Specifically:
((300,000 + 30,000)/2) x 270000=44.55 billion
Where does the /2 come from, my understanding of the formula is:
Coins created? + reward per block / ?? x Block heightAnd
30,000x144x365=1.5678 billion
Where does the x144 come from? is that the amount of blocks created per day?
which would make the formula:
Coins per block x amount of blocks per day x days in a yearAny clarification or links to related articles would be much appreciated.
*edit:
I now realise where the 144 comes from.Blockchains work by bundling every transaction made in 10 minute intervals into a block. Miners validate the block and then it's added to the blockchain.
- Every hour 6 blocks can be mined.
- 24 hours in a day
= 6 * 24 = 144
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I figured this out.
The top figure is the total number of coins that will have been mined by the time each block starts spitting out a constant amount of coins (30,000 per the white paper) in perpetuity. I don't get the 2 either, but I literally calculated it out and got the same number.
The bottom figure is the amount of coins that will be produced a year, in perpetuity, after the mined blocks produce 30,000 per block forever and ever.
The last piece of the pie would be to figure out how much "burn" is produced every 10 minutes (the length between mined blocks being released), and you can rough what this coin will cost on-going. It obviously will not take into account irrationality of investors, and is making huge assumptions on adoption/burn.
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What is the average of the numbers 1 to 10? (1+10)/2=5.5.
There are 270,000 blocks that start off at 300,000 reward and dropping down to 30,000. What is the average of all numbers from 300000 to 30000? (300000+30000)/2=165000 average reward * the number of blocks, 270000, equal total coin supply.
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@dime perfect explanation, cheers.
