It is the process in which Vericoin holders are incentivized for holding their coins in their wallet and gain interest that is dynamically calculated by Vericoin's innovative PoST (Proof of Stake Time) staking process. Unlike Proof of Work systems, this process ensures Vericoin holders are rewarded interest as opposed to merely anticipating that coin value will increase over time which does not necessarily materialize.
How Staking Works
Vericoin staking process is analogous to having a saving account with the bank and gaining interest. Instead of gaining interest with a pre-defined interest rate over a pre-defined period of time though, Vericoin takes the traditional banking interest rate model to a higher/improved level thanks to its dynamic interest rate calculation capability. Vericoin's innovative staking process calculates the Just In Time (JIT) inflation rate based on the new coins that are currently being minted (through staking). Just In Time (JIT) Interest rate is then calculated based on the current inflation rate and the percentage of total circulating coins that are currently being staked.
The benefits of Vericoin's innovative staking process are multi-facetted and can be summarized as follow:
- Vericoin holders know that they will be rewarded interest payments as new Vericoins as long as they stake their coins in their wallets
- When the number of Vericoins that are currently being staked goes down, interest rate goes up which further incentivizes Vericoin holders to keep their coins staked in their wallets
- Due to the above, coin holders do not prefer to spend and/or convert their coins into fiat, instead they prefer to keep their coins being staked
- The more Vericoins that are kept in the wallet and not spend, the value of Vericoin increases over time as circulating supply is curbed
Compare above with buying into a Proof of Work coin and expect its value to go up in pure adoption speculation! Vericoin's staking process is self governing and part of the overall Vericoin ecenomy that is appropriately called Vericonomy.
Fast Transaction Speeds and High Scalability
Vericoin transactions are already 10 times faster than Bitcoin. Bitcoin's slow transaction speeds stems from the fact that it attempts to be a currency and a digital commodity at the same time. Mining and currency transactions are processed by the same single blockchain. Due to this conceptually wrong design, transaction speeds get slower as the distributed consensus network grows. At the time of this writing, a single Bitcoin transaction may take up to 30 minutes and in some instances hours to complete!
Vericoin transaction speeds will get even faster as much as down to 30 seconds with the activation of the binary blockchain in late 2018. Vericoin's complementary Verium Reserve (VRM) blockchain will process only mining transactions and act as the digital commodity blockchain. On the other hand, Verium will remain as the pure digital currency that you can actually use in real life use cases due to its super fast transaction speeds and high scalability features.
Another equally important benefit of Vericoin's innovative staking process is about achieving true de-centralization and improved overall security in the distributed consensus network. As more Vericoin wallets are staking in the network, there are more nodes in the network to confirm transactions which immensely improve overall security. Same applies to de-centralization as Vericoin staking process does not require any kind of special appliance such as ASICs and GPUs. Just use your commodity computer to stake your Vericoins!
With the upcoming releases of Vericoin mobile phone wallets (Android and iOS), staking will get even easier. Just install the mobile wallet onto your phone, start it and you will be staking 24/7. As staking on your mobile phone is 24/7 and such an easy process, the number of nodes in Vericoin network will increase exponentially over time which will further contribute to a truly decentralized and highly secure Vericoin network.
Last but not the least, staking is a major contributing factor in stabilizing the price of Vericoin over time. Unlike pump and dump Proof of Work coins, staking gives Vericoin a true store value. There is a tangible reason to hold your coins as you gain interest through staking. Compare this with the scenario of buying into a Proof of Work coin in anticipation that it's value will go up only to find out its price wildly fluctuates in a short period of time and people panic sell to stop their loses.
There is no need to consume large quantities of electricity with staking. It is estimated that Bitcoin and similar proof of Work mining operations consume $1 million dollar in electricity and hardware costs per day as part of their consensus mechanisms that is not sustainable over the long run.
Guide to Staking
rough Outline [detail to come]
1. Definition of staking
From Wikipedia: Proof-of-stake (PoS) is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. In PoS-based cryptocurrencies the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e. the stake). In contrast, the algorithm of proof-of-work (PoW) based cryptocurrencies (such as bitcoin) uses computationally intensive puzzles in order to validate transactions and create new blocks (i.e. mining).
Here is some good copy from the website, don't have time to integrate it right now:
Network stake-dependent interest is the mechanism in which the amount of coins minted during the proof-of-stake phase occurs. Instead of a flat 1% interest, Vericoin's interest rate can range from 0% to just under 3%. The practical range of interest is between 1.5-2.5%. Based upon the number of coins being staked (occurs when the wallet is open and unlocked), the interest rate varies. The more coins staked, the higher the interest rate. This provides incentive for keeping the client open and unlocked, further securing the network. The additional security ensures that the blockchain is not compromised and forked. In addition, it provides incentive for owners of the coin to use it as a savings vehicle as it earns interest at a more reasonable rate and more representative of a real economy. The VeriCoin development team studied the economics of interest/inflation rates in model systems and the key range for a stable economy ranges between 1.5-2.5%. Finally, with a slow inflation rate (1.5-2.5% vs ~10% for Bitcoin), the coins have the potential to become a steadily valued currency.
From here: https://www.vericoin.info/interest.html
2. POS and POST; Vericoin is POST
3. How to get started
a. Install VRC wallet [reference] b. Purchase VRC on an exchange 1. What exchange is 2. Which exchanges 3. Can I use my Verium? c. Deposit purchased VRC to wallet. d. Wait for coin maturity. e. leave wallet open. 1. What happens if/when I close the wallet?
4. Staking calculations
a. Local staking b. network staking
5. What the wallet shows us
6. How staking relates to dual chain and verium
7. Where to get help
[Can we please set up a staking channel in Slack]
whats the staking calculation for vericoin? 2.5% APR +/- a little varance. 15,000 aged coins would get you roughly 1 VRC per day over time. Its not hyper interest, we all know those coins simply arent sustainable.
For staking you need coins in your wallet (the more the better) and have it running (with connection) at best 24/7. While online your wallet supports the network and processes transactions - for doing so you gain interest. One detail about VeriCoin (PoS-Time): your coins need to "mature" in your wallet for about 8 hours to start staking.
Staking with the VeriCoin daemon (vericoind)
./vericoind walletpassphrase YourPassword 7200 true -> 7200 is the number of seconds the wallet will stay unlocked for and the true means it stays unlocked for staking only. If you check ./vericoind getinfo you should afterwards you should see "unlocked_until". This will be the unix epoch time the wallet is staking until. I usually use a big number like 999999 = ~ 11.57 days instead of 7200 like in the example (or 604800 = 7 days)
0 connections is not good, try file > reload blockchain and click the replace conf file option.