Good question. In 2.0, universities (and other accredited public research institutes) will have network authority to create certificates. These certificates are used in the mining process--each is tied to a block, and gives a given number of potential nonces to try. The coins are never held by the university, but rather generated on the network as coinbase transactions when a certificate is mined.
2.0's goal (or one of them, at least) is to balance centralization and decentralization in a manner that makes it secure, and still allows it to perform its goal of conducting scientific research. To rehash previous discussions a bit, meaningful scientific computations have to be led by someone--someone with specific talents has to program in proteins, build physics models, analyze results, etc. Only "trivial" Proof of Works (hashes, prime numbers, etc.) can be generated and verified on the network without third-party centralization of some type. Primecoin is a perfect example of the bleeding-edge of PoW-usefulness that can be fully distributed. If Primecoin ever wanted to switch to do something else (find different types of chains, for example) it would have to have a code update and a hardfork, which is centralized in itself. Curecoin takes the expected adaption of adding and removing projects as they are born and completed, allocating resources between projects by producing market pressure to encourage hardware specialization (not ASICs per-se, but having your CPU do something entirely different than your GPU, and both earn Curecoins by doing work they are independently good at, although an ASIC for these projects would be damn near impossible to develop given the complexity of the problems and rapid changes of the projects, but if one were to be created, it'd be the holy grail of computational research) and makes that automatic. It KNOWS things will change, that workloads will differ, and unloads that to a point where the network can stay the same core throughout years of changes. Sure the core will be updated for efficiency, and block distribution for storage, and new platforms, but the core principles of it can stay the same, and hardforks should rarely be necessary.
So in the crypto world, it's a matter of choice: you can have full decentralization Bitcoin (or close to it) by doing work that provides no external benefits other than security (which is, arguably, extremely important, and validated by the value of the network), you can have a hybrid decentralization Curecoin, where coins, after being generated, are completely decentralized, no entity can reverse transactions, but the generation of coins is tied to a set of rules that have validation through centralized sources, or you can have a system which is purely centralized PayPal, but extremely easy to use, versatile, and requires a high level of trust.
Network authority to create certificates... so my only concern then is whether if these certificates can be exploited, forged by an insider, or created at will by the network authority without being reviewed by the curecoin team?
Basically, trust is the issue with this crypto, anytime the word trust is involved there's problems. Do we basically have to trust that CureCoin developers/university programmers won't create a cheap, easily mineable and unreleased certificate that they're mining behind the scenes?
Other than that, I don't see this coin being centralized by my definition, though wrong I may be. For example, one can say curecoin is centralized because it is dependent on Folding@home, yes, but I think that the wallets with curecoin that are distributed to folders are whats truly centralized.
Anyway, good work guys. Thank you for the response, very well put in laymans terms for a layman like me. Always looking forward to the future of this crypto.
Each certificate can only be used for mining one block, and specifies which block can be mined, which is always the current block, assuming the certificate authority is on the correct chain. When a certificate is used to mine a block, the certificate is included in the block, so anyone on the network can read it. Unreleased certificates would be possible to make, but as soon as a block was made with one of them, they'd have to be made public for the network to accept the block, so they'd have to be released.
Yeah, centralization is hard to define. Is Bitcoin centralized because the majority of users would install an update pushed by the devs without reviewing the code personally? Centralization vs decentralization is truly a gradient--A service like PayPal could be made where you need to digitally decrypt your own payment info with a passkey that only the user provably holds, which would be considered less 'centralized'.
I suppose a reasonable, practical definition of centralization is the measure of the negative or undesirable impact one party could exert on the network or service at will. Curecoin is certainly more centralized than Bitcoin and other similar derivatives, a tradeoff that comes with allowing one party or several parties control the work done for the proof-of-work scheme, rather than it being simple hashes.
The largest centralization (ignoring one development party, running on only one technology for data dissemination, etc. that is shares with nearly all other cryptos) comes in from the ability for trusted institutes to issue these certificates. In theory, such an institute could generate certificates for themselves that look realistic, mine with them, and redeem the coins. The certificates themselves would be public, but the pseudo-anonymity of Curecoin could make them difficult for people to tell apart from legitimate certificates. There does have to be some level of trust between the network's users and the certificate authorities, however the network will (although likely not at initial release) allow the network to vote (based on balance) against institutes. Voting an institute off the network would require a lot of community support and cooperation, and we're still playing with the numbers, but would be possible in the event that an institution was caught and proven to be forging certificates for themselves. Such an analysis of institutes for up-right behavior might involve comparing production numbers to large-sample probability of mining and finding a significant discrepancy, or a whistle-blower inside of the institute.
The network will become less and less dependent on a specific DCN (F@H, GPUGrid, etc.) as more are added, and each represents a smaller slice of the mintage pie.
Will Curecoin prove to be sufficiently distributed to appeal to the crypto community? We believe so, and we've received some great feedback at both the Chicago and Miami Bitcoin conferences. Lots of people at the booths brought up good ideas, proposed mechanisms for network protection and attack mitigation, some of which have worked their way into the code currently available for public alpha testing.
Curecoin will certainly NOT appeal to people with specific needs or desires, such as extreme decentralization, identity masking, end-to-end encryption, etc. That being said, it does offer some network-security advantages over other cryptos, namely Merkle Signatures to resist Quantum Computer attacks (implemented in Alpha, go ahead and play around with 'em!), and network blocks tied to certificates, which makes forking extremely difficult.
I know I'm getting off-topic, but I believe this deserves to be brought up in a discussion on centralization/decentralization, because ultimately the interest is in network integrity, for cryptos. Due to the layering requirements of blocks from different certificate authorities (dictated by an algorithm still in development, but basically rejecting blocks that stack certificates from the same authority, so blocks 288, 289, 290, and 291 couldn't all be from F@H), and the fact that certificate authorities will only sign certificates for the current (or 1-2 blocks into the future, if they're at their maximum consecutive stack) would make forking the network extremely hard. Even a certificate-authority hell-bent on destroying the network would be unable to fork back more than three blocks, and forking more than 9 blocks would require compromising three certificate authorities simultaneously, and acquiring all data needed for signing certificates. As this should never happen on the network, the reference client won't fork back more than 10 blocks under ANY circumstances except a manual intervention by the end-user, which shouldn't ever be required due to the structure of the network. So while the network is more vulnerable to the creation of Curecoins that aren't deserved, it is (in theory) far more resistant to attacks which compromise the movement of money around the network. Even if you could build a farm with 1,000,000,000 GPUs and fold proteins millions of times faster than everyone else combined, that wouldn't allow you to manipulate the block generation in any meaningful way. Once a coin got 4 confirms, it'd be very safe, and once it got 10, it's there to stay.
While not technically true based on the definition of a checkpoint, the network behaves as if every block more than 10 blocks old is checkpointed. That number might change as we play with the network math during alpha/beta testing, but the concept stays.