Topic: Proposal: An Alternative Currency that doesn't "waste" energy - page 3. (Read 4877 times)

That probably puts it most succinctly, and I haven't thought about it that way previously. The money goes into something one way or another. The spent electricity feels like waste- but even that can be useful.

A quick solution to your question would be for miners to use their waste "heat" for something 'useful'. Many heat their homes with it, and I've heard of some people drying fruit with it. Rather then redesign the coin, why not redesign the miner? Indeed if FPGA's take off there might be much less waste heat/electricity all in one go.

Sometimes the simplest solution is the least obvious. :-)

I get what your saying- but it's hard to see what people would be investing into if there wasn't some sort of cost to it.

Others have mentioned the idea of the hashing process doing something "useful" IE: perhaps curing cancer or some sort of SETI signal processing, but there is a very convincing (although I can't point to where it is at the moment) argument as to why the hashing process can't be anything 'useful' in an outside sense if the integrity of the system were to be maintained.

Not sure I understand you correctly here, but (diminishing returns) as long as each extra bit of work can get me a bit of a return, won't people continue to exchange/waste work to keep buying lottery tickets until it's no longer profitable, the same way people continue to exchange/waste work for mining rigs rigs and electricity until mining is no longer profitable? What is the difference between $25,000 being spent on lottery tickets to secure a system, and $25,000 being spent on mining to secure a system? And if the former is less than $25,000, how do we know it's just as secure, if security largely depends on it being too costly to attack a system?
I'm trying to look at this as a series of simple math problems, and I feel I may be missing a variable that would differentiate the two systems. Maybe the whole system can be made way cheaper to run simply by lowering the rewards (already automatic) and lowering the transaction fees? People won't mine/waste electricity of the cost of mining drops below the payout amount.

I would argue that there is a potential for Bitcoin mining to consume very large amounts of resources, on the orders of millions of dollars worth of electricity and computer capacity every day.  It's closer to $20,000 per day now.  People are fine "losing" that much, as they get at least that amount in Bitcoin in return.  But wouldn't it be better if we could have a system that had all the safety and security and decentralized control of Bitcoin, but WITHOUT the extra overhead?  I would think that would be a *good thing*.

BTW - after thinking about it, I would agree with other users here that a "lottery" per se may not be essential - I think it could be replaced with pro-rata return on investment.

I haven't addressed the bootstrapping problem.  You could start with a Genesis block, and then play nice until enough other people joined in and created enough of the currency to support the block commitments in a fairly uniform distributed way.  You could also generate "New Coin" in exchange for destroying a Bitcoin (i.e., enforce a 1:1 exchange rate - at least going one direction).

All the proofs of signing are there in the block for everyone to see and independently verify (signatures just use private keys for any Coin Address) - just like Bitcoin shows the proven small hash value and nonce.

Energy *is* being wasted if you consider that the same amount of *work* can be done for a lower *cost*.

yOkay, but where do the coins come from in the first place? If it's "proof-of-stake" who starts it? How would it possibly work P2P? The point of Bitcoins proof-of-work is that you can go and do the work yourself, show everyone else, they check it, looks good, approved, and everyone invents 50 coins for you.

How would you get a proof-of-stake system started? There are no coins, so you can't even buy a stake in the beginning because the coin doesn't yet exist, but there's no method to make coins so you can't make them. Even if someone did make a "original coin" the next person would have to pay that original person money to create his/her 'stake'. It immediately becomes a ponzi scheme with the original coin maker sitting at the top. 

Energy isn't being "wasted" when you make bitcoins. Its the investment for which the coin is the return. Gold has historically had value because you had to 'waste' energy to mine for it in one way or another. Nearly anything that is at least relatively rare has value if it requires energy to obtain.

I see it this way:

Bitcoin
1) Person does labor (office, construction, IT, fries & burgers, whatever)
2) Labor -> Money (paycheck)
3) Money -> Electricity (electric bill from mining)
4) Electricity -> Hashed block and 50BTC reward.

As long as reward > electricity/money/labor, repeat steps 1 to 4

Your proposition
1) Person does labor (office, construction, IT, fries & burgers, whatever)
2) Labor -> Money (paycheck)
3) Money -> Lottery entries
4) Lottery entries -> Accepted block and 50BTC reward.

As long as reward > lottery entries/money/labor, repeat steps 1 to 4

Point is that electricity isn't coming out of thin air. Labor is being exchanged for it (hopefully good productive labor). And as long as the final reward is above the value of the initial labor/money, it doesn't matter what intermediary system gets used. In either case people would create as much "waste" as possible to get the maximum possible Bitcoin reward for their labor. The only possible variable may be efficiency of the process, though in that case the only difference will be how much of the in efficiencies make the money just disappear (inconvenient transaction fees, lost time, etc). Either way the same quantity of labor/money will be "wasted" to achieve the same level of security and reward.

Here's a modified proposal that addresses "problem 1" - how to allocate reward for those contributing to securing the block chain.

In most ways, this protocol is identical with Bitcoin's, except that it relies on "Proof-of-Stake" as opposed to "Proof-of-Work" (thanks, cunicula for the terminology).  Note that the utility of mining, is to certify a block chain, so that the entire community can agree on a single version of the transaction history.  Bitcoin's protocol is designed to make it expensive for any single bad agent to out-compete the rest of the network, in order to re-write history and invalidate transactions.

About $200 worth of computation resources (electricity, capital costs) are (currently) collectively consumed in creating each block.  So, someone who wants to "re-write history", need spend more than that to replace a block with their own (which is why you should wait for many confirmations before accepting a large transaction as valid in the block chain - it costs about $1,200/hour to go back in time a re-write history).

Given the volume of transactions currently in the Bitcoin network, this is quite a high "tax" we are paying; and it will presumably only be getting worse if the value of Bitcoin rises.

So, why not use the currency itself be staked in order to ordain a block as valid?

• Someone creates a proposed "next block".
• Anyone who wants to, can sign that block, by committing some of their Coins to it.  For example, I'll stake 100 Coins over the next 144 blocks (24 hours) - for total of 14,400 "Coin-Blocks" of commitment.
• When the block has collected enough signatures (the sum of the Coin-blocks committed), the block is considered valid, and a new block can be started.
• The required block bounty can be adjusted just like the current "difficulty" is adjusted in the Bitcoin protocol.
• In return for taking some of your Coins out of circulation, you earn a proportional amount of the block payout (e.g., 50 Coins).
• Each client deducts from the balance of any address used to sign a block, until the expiration block of the commitment (thereby taking it temporarily out of circulation).
• Clients break ties in potential block chains, by accepting the one with the largest total amount of bitcoin-blocks of commitment.

Sorry thus is not a fully fleshed out idea.  Maybe "proposal" is the wrong term.  I am hoping to find others in moving this forward (or prove that is not feasible).

Based on the discussions I've seen, this appears to be the consensus. I think you're right too, but I haven't seen a formal proof... Just the intuitive explanation that more people will mine if the money is easy, and only project-supporting idealists (a minority) would mine at a loss.

Good thread, I have been wondering about the rationality of bitcoin mining, not that I expect anyone to behave rationally, particularly since I don't offer a definition of what that might be 

The computing power arms race seems to be headed for a place, the FPGA, where the incremental hardware cost to generate bitcoins cannot be allocated to any other use for the system. A CPU is a generally useful thing, GPU mining at least gives you a bitchin' game machine , but right now there's not much else for most people to do with an FPGA.

I've built and worked on enough largish systems ( 250+ node Intel clusters, HP Superdomes, vast IBM Mainframes, Cray vector machines, you name it, I've done it ) that simply having a lot of cranking going on for its own sake does not impress me.

For that matter, I'm entertaining a thesis that the return on bitcoin mining should gravitate to near zero. I've yet to formalize an argument leading to that conclusion and I'm curious if anyone else has had this thought.

All that said, I've personally donated decades of CPU time to distributed projects like World Community Grid, and used the opportunity of a failed video card to acquire 343 Mhash/sec of ATI bitcoinage at an incremental hardware cost of $149, 2.3Mh/$, I see no reason to go further than this.

One thing I've seen done in the WCG projects is that the "payout" is based on the portion of your resources that are committed. The CPU client benchmarks the local system periodically and your return is adjusted to reflect this. I don't know the details of the scoring system, but a simplistic leveling illustration would be that the payout is the same for allocating 99% of a cell phone CPU as for allocating 99% of the bitcoin mining monstrosity du jour. Obviously there are some details to address such as mitigating capacity fraud. I do recall that being an issue with the open source BOINC client a long time ago.

If the computation actually added value such as the molecular biology work done on WCG does, then a scale that rewards gross total computing power to some extent could be implemented.

This would be approximate with respect to energy consumption. Were there benchmarks available that would let applications like BOINC or bitcoin measure the energy efficiency of a contributing system one could scale returns for that as well, but I don't know of a reliable way to do this across diverse hardware.

This thread is so fail, where is the "proposal"? No, saying "let's make something different" is not a proposal

This will amplify one of the most undesirable effects of capitalism : you can't make money if you don't already have money.

"Imagine something very similar to Bitcoin, except, instead of "mining", you risk some amount of your currency in order to receive some in return when you help secure the block chain. "

But how would that system work? Lets say for the 1st participent, to whom does he/she give their currency? And lets say they win their "risk" where does their "profit" come from? From newer people who join and give in their 'currency'?

I can't think of a decentralized RNG other than proof-of-work. Does anyone know any?

Edit to clarify:


Where would this random number generator reside?

I just posted a rather long philosophical rant about Ownership in CPU currencies, and I think that for the reasons I put forth in that post, your idea would not work. People can already "buy in" to any of the coins. You don't have to mine you can just outright purchase coins which is similar to what you're advocating. But the problem in my opinion then is that people who would rather contribute via development or mining would be cut out- and you need these people. You need the dev people to grow the software and the miners provide critical backbone support to the network. You can't really exist without those two, and if individuals can just "purchase" shares they have no incentive to really 'stay online' to provide the P2P infrastructure. They can just assume someone else will do it. Mining provides payment for supporting the P2P infrastructure.

I think you're looking at the system from the wrong direction. You're not "winning" anything when you solve a block and get coins. You're being paid for providing your CPU cycles, electricity and internet connection for supporting the P2P network. It only seems like a lottery because it's random, and it's random so that over time the payout is even. You can already have a greater "share" or chance at "winning" by contributing more processor power to the network. But each increment of contribution has the same compensation over time due to the random nature of the payout.

Besides all that- who would you be purchasing from in the first place? IE: who gets all the cash up front? I don't think *anyone* feels like purchasing Flooz 2.0

Well, not "free" - but I'm looking for a system without the inefficiency of the Proof of Work system of Bitcoin.

Imagine something very similar to Bitcoin, except, instead of "mining", you risk some amount of your currency in order to receive some in return when you help secure the block chain.  But you risk losing your coins as well, so you won't have people gaming the system expecting to receive something for nothing.  There is no software yet, as this is just the beginnings of an idea - with many parts not solved yet.

I'll look for your posts.  I'd love to help build something along this line ... but there are still quite a few issues to iron out to convince ourselves that participants couldn't cheat (or it would cost them more to cheat than to play nice).

there are probably already dozens of fpga miners out there.  Reduced miner reward will help.

Please describe a Lottery system that is free? How exactly does such a system work ? What does it run on? How does it avoid the use of energy? I'm assuming that since it is free, it must be moderated by someone/something......a piece of software?

How is this managed? how does this no-cost system avoid fraud ??

I think "free" is a beautiful Utopian idea but then again where is any useful system in the world that is ...... FREE!!!!