Alice, Bob and Charlie each own 100 PPCoin, and would like to generate more using Proof of Stake.

  • Alice keeps her ppcoind running all the time
  • Bob stores them offline for a year, and then runs ppcoind for a week
  • Charlie uses some other arbitrary "strategy", where I define a strategy by a sequence of ON/OFF schedules, that can possibly depend on whether he finds coins in previous schedules. (Technically it's a decision tree).

Would all the above, on average, achieve equal expected amount of PPCoins in their wallets? Is there a dominant strategy? What about a combination of maximum expected value and security (running your client 24/7 might yield the max amount of PPCoins, but it's also the most volunerable one (wallet must be decrypted for coin generation)).


1 Answer 1


alice finds the most blocks. 520 confirmations + 30 days of no-stake makes a maximum of 12 blocks per year from the same coins. compound interest makes no impact at all with 12 compounds and 1% ROI .she makes max 1.00437%

bob makes a perfect 1.00% but loses a lot of stake and risks not finding a bloc in that week.

charlie makes 1.00-1.00437% depending how often he finds blocks.

actually, they can find much more blocks, as parts of wallet have different age, but its just as running many wallets, there is no difference in maths.

  • Wait - I'm looking at the overall effectiveness of Bob's strategy. When t --> infinity, saying something like "bob loses a lot of stake" is meaningless, I want to get the annual percentage Bob makes on his money.
    – ripper234
    Apr 11, 2013 at 9:56
  • bob makes a perfect 1.00% but loses a lot of stake and risks not finding a block in that one week - than he starts loosing, but not much. if he finds first block after 3 years he makes 3 PPC, and have 103 coins after 3 years. if he finds a block every year he would have 103.03 coins.
    – XORXOR.
    Apr 11, 2013 at 12:30
  • I'm still missing a complete analysis that isn't dependant on the odds of him finding a coin. I'd like to realize the expected value of the different strategy - that is, a single number that summarizes his average projected earnings (the same for Alice and Charlie). Perhaps you wrote that and I misparsed your post.
    – ripper234
    Apr 11, 2013 at 12:37

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