Topic: Proof of Work as Currency Unit, no block chain required. - page 2. (Read 2904 times)

All of the fancy crypto, block chain, etc may be far more complicated than necessary.

Suppose that the fundamental unit of currency was 'one mine pool share'.  
Suppose that mining pools accepted work from anyone who was willing to pay to have the hash found.

There is a finite amount of 'work' that can be done in a given period of time.  This represents the monetary base.

A merchant would sell goods and services priced in 'mine pool shares' and the buyer would need to generate enough 'shares' for the merchant.  It is impractical for the buyer to generate those shares himself (like mining for gold in your back yard, possible but too slow/rare to be practical).  So the buyer will hire a mining pool to mine for him.  Deepbit currently averages 50,000 shares/block or $0.01-3 per share.   50 BTC * $30 *10 = $15,000/hour is what people earn on deepbit selling their CPU time.   So a merchant gets work from a pool and gives it to the buyer who buys work from the pool.  The merchant is paid for the work by the pool and the buyer gives money to the pool.

Real value is transferred from the buyer to the merchant, but no block chain was ever necessary.  Clearly it helps that bitcoin has created a default 'market' for proof of work, but there is no reason why the bitcoin block hashing would be needed long term.  Super efficient hashers could 'create work from nothing' and pay people $1 to solve it, but charge people $2 to have it solved for them.

Everyone switches to exchanging proof of work instead of transferring balances with a public transaction DB.  Currency exchanges would turn into working in one currency and selling in another.   So I could get work from deepbit earning bitcoins and then pay people in $USD to find the hash.  The people I pay in $USD may turn around and hire someone else in BTC until ultimately someone provides the CPU time in exchange.  

Completely decentralized, completely anonymous.

You think a government could outlaw 'buying and selling' CPU time?