With Krakin’t miner operating by Proof of Burning, you may lose your money.
Development of the miner has begun while the token is nearing the last stage of development before the release. It was a necessary step to take in order to see if there are a few more tweaks to make before releasing it into the wilderness. It is the obligation of Krakin’t to begin issuing the warnings about the mining algorithm. Nevertheless, this document will briefly explain what measures will be taken to prevent losses from happening.
By design, there will be two modes. One is the solo mining, where person is not supporting anyone or any project but themselves. Second is the group mining where the person decides which group to join and support the projects they like. These will have to be different contracts and the solo miner will be issued first.
As you burn the tokens, you will be giving the opportunity for those who burned before you to take an advantage of your actions, unless there are some strict measures applied inside the contract. The only way to do this is to slow them down and give everyone equal chances. This means that we will have two different kind of epochs. One is the mining epoch, second is the rewarding epoch. During the rewarding epoch, the rewards are always going to be fixed, not going below the amount that was burned. Unless something changes in a design, you will be able to get your burned tokens back during the designated mining and reward epochs. However, if you miss the cycle, you will be exposing your burned tokens and you may lose money should people decide not to burn the right amount of tokens like they did in a previous cycle. Furthermore, it is most likely that you will be able to get your tokens back only during the next reward epoch, with probable losses (or gains).
As the main developer of this project, I really do not like this idea. It is exactly what happened to me investing in XIO, it is the way I got wrecked, and one of the reasons why I begun working on Krakin’t. Please keep in mind that the mining is done without any hardware, and that controlling the supply and the time when the rewards are given is the way to impose the mining difficulty. Therefore, we will need to develop the software that is constantly asking the contract what epoch the token is in. One thing that I can do, however, is to make the reward epoch be not less than (lets say) 5 to 14 days. The exact numbers, however, will depend on the contract. Again, this is an ass-hole design, given that money can be lost, and if anything better comes along, it will take the higher priority.
These are some early glimpses at how the mining part may operate. So far, Krakin’t has only gotten the reward/block/halving/supply mechanisms right, which took about 4 days of investigation, planning, coding, and testing. Good thing is that this token can be released independently and any upgrades or fixes can be done live. Hopefully, in the meantime, some better epoch/reward mechanism will appear and I will be writing about it when it does.
