bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)

[Jim Bell]

The use of CPU 'effort' as 'earning' bitcoins (or other electronic currency) was a good idea.  Problem is, there's plenty of electricity being wasted in the process.  It seems to me that it should be possible to develop some sort of use for this dedicated CPU effort.  What's a major use of CPU power?  One is weather forecasting, another is simulations of various kinds.  These use huge amounts of computer-time, and if they are made to be sufficiently divisible people could earn digital-coin by doing things that are actually valuable in and of themselves.

    Jim Bell



________________________________
 From: David Vorick <david.vorick at gmail.com>
To: Javier Liendo <javier at liendo.net> 
Cc: "cypherpunks at cpunks.org" <cypherpunks at cpunks.org> 
Sent: Monday, November 25, 2013 5:43 PM
Subject: Re: bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)
 


Bitcoin has a lot of problems.

Andy, the problem isn't the denomination, the problem is that Satioshi has 5% of all the currency, and the Winklevoss twins have another 0.5%. If bitcoin becomes worth 100 trillion dollars, they've got a solid 500 billion for being nobody and doing nothing. That's a problem to me.

Another problem with bitcoin is that the blockchain won't scale. Another problem is that nobody knows how to price transaction fees. And then there's the selfish mining problem.

I think though that we'll see other cryptocurrencies that solve these problems. Bitcoin is overinflated, and while the current alt coins aren't offering much in the way of competition.

I'm working on one right now. It's not built but the idea is to use proof-of-contribution instead of proof-of-work, where contribution is disk storage contributed to a distributed network. The disk storage is used to house the blockchain, but it can also be sold on a market for people to use. Theoretically, this gives people a way to price the currency (using the value of cloud storage vs. the price of storage on the network using the network currency).

The tricky part is preventing cheating, but I think I have a decent solution.

I don't however know a good way to distribute currency to the network, for the problems I was explaining to Jim Bell. Storage is currently getting cheaper at an exponential rate, and I have no idea how to predict the volume of users over time, nor a good way to measure the volume of users as immune to sybil attacks. How do you prevent the early adopters from becoming stupid wealthy if the currency takes off?
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