Apart from tipping your favorite content creator and fast transactions (usually under 1 min), Reddcoin offers a really good incentive to have coins in your possession.
No Mining
I briefly touched on this in one of my previous articles and I will expand on it and explain how it works.
Reddcoin utilizes proof of stake velocity which is an algorithm developed by the Reddcoin core team.
Proof of Stake
In order to best explain PoSV, it's best to explain proof of stake which is a method where users sign the blocks by showing their ownership of coins. Also the chance of signing new blocks is determined by your percentage of total coin supply. This ultimately means the more coins you have, the higher the probability of you earning more.
Coin Age
This is simply the length of a user not doing anything with the coins. After a transaction is done, the coin age counting starts from 0.
Staking
This is the process that decides who gets to sign new blocks and it's decided by the amount of coin age a user has. Staking doesn't require a graphics card or ASIC miner as it's designed to use a low CPU usage which means everyone with a PC/Laptop and connection to the internet.
Minting
This is the part where you successfully sign new blocks and receive interest for the staked coins in your wallet. After receiving your reward, the coin age for the coins currently staked then returns to 0 and starts staking again.
Cryptocurrencies that employ proof of stake have an annual interest rate and Reddcoin interest rate is 5% so your annual gain of staking 1000 RDD would be around 50 RDD.
Comparison
PoSV Differences
Proof of stake velocity is designed to make the network much more active. The original proof of stake concept allows users to generate coin age while their wallet is offline and they have no reason to have their wallet online plus it doesn't contribute relatively to the network.
PoSV changes that by making active users much more likely to earn more than those who keep their wallet offline for long periods.
Velocity
The image below is a comparison between the coin age weight accumulation of PoS and PoSV. The vertical axis represents the velocity and a velocity of 1.0 = normal PoS coin aging.
Chances for Staking
Your next reward is calculated by the network weight divided by your total coin weight.
Calculators
- Earnings Calculator: http://jsfiddle.net/yE6Vp/12/
- Expected Time Until Reward: https://agroff.github.io/posv/
Thanks for the detailed explanation - I am still a bit lost but will just read it again
:)
Reddcoin has been added to StakeUnited. Staking in a large pool enables you to get stakes much sooner than by yourself. No minimum to stake, you will get stakes daily. This allows you to compound your earnings much faster. You don't need to need to do coin merges or have a computer running 24/7. All this for a 3% fee on the stake. It's well worth it, check it out at: https://stakeunited.com/Naz