Yes but it still doesn't compare to the price fluctuations of bitcoin.
   But you are right, everything has fluctuation in price. I merely wanted
   to show that some thing have a more volatile price than others. The US
   bond is a typical financial example of something that doesn't fluctuate
   dramatically in price. (And even that still fluctuates, but very
   gradually by comparison to stocks & commodities).
   So, yes, by tethering a currency to the value of cloud storage you are
   still limited by the fluctuations of the value of cloud storage itself.
   But at least now you have a concrete way to price your currency, and I
   think it's reasonable to assume that the value of cloud storage won't
   be decreasing any time soon. (Price per TB may decrease, but we don't
   tether the currency to the value of 1 TB, we tether the currency to the
   value of $1 worth of disk storage hardware).

   On Mon, Nov 25, 2013 at 10:15 PM, Joe Wang <[1]joe_wang@yahoo.com>
   wrote:

   Hi David,
   I am not sure of your assumption on the cloud storage. What about the
   component cost goes into it? memory costs? I remember when I was a teen
   trading DRAMS the price isn't that stable for certain period of time.
   So even if demand for cloud storage fall, wouldn't cost of the cloud
   storage could be rising due to other events?
   About perishable commodity. I don't know where you live. But I know
   cost of milk has gone up tremendously in certain parts of the world. In
   China, cost of salt has gone up 10 folds in a short few years. Price of
   corn and orange juice can always limit up or down if some crazy weather
   hit certain part of the country.
   -Joe
     __________________________________________________________________

   From: David Vorick <[2]david.vorick@gmail.com>
   To: Andy Isaacson <[3]adi@hexapodia.org>
   Cc: "[4]cypherpunks@cpunks.org" <[5]cypherpunks@cpunks.org>
   Sent: Tuesday, November 26, 2013 10:52 AM
   Subject: Re: bitcoin as a global medium of exchange (was Re:
   Interesting take on Sanjuro's Assassination Market)
   Joe, the only reason that the price of cloud storage would fall is if
   demand for cloud storage falls. The value of cloud storage over time
   should be fairly stable, perhaps not as stable as today's US dollar but
   certainly more stable than bitcoin is today.
   But in the case of tulips, bitcoins, etc., their stability was only
   derived from their speculative value. Bread will be reasonable stable,
   because people don't speculate in bread. Bread has a minimum price,
   because there is a limited supply and a clearly defined need. All
   commodities are not equal. Bitcoin is one of the worst I can imagine,
   but the tulips during tulipmania take the cake.
   I believe you can regulate cloud storage in a way that prevents
   fraudsters from manipulating it. The only assumption I need is that the
   majority of the network is honest. You can use hashing + random strings
   to confirm that a person still has the file they are hosting. You only
   need then to be sure that the person hosting the file and the person
   uploading the file are not in cahoots. You can achieve that by making a
   random mapping between people and hosts, and only picking the host
   after a person has announced how much file storage they wish to rent
   (and paid for the first month). This makes it too expensive to host
   files on your own machines, because you have a very low probability of
   getting the opportunity to store a file on your own machine.
   On Mon, Nov 25, 2013 at 9:43 PM, Andy Isaacson <[6]adi@hexapodia.org>
   wrote:

   On Mon, Nov 25, 2013 at 06:20:27PM -0800, coderman wrote:
   > On Mon, Nov 25, 2013 at 6:12 PM, David Vorick
   <[7]david.vorick@gmail.com> wrote:
   > > ...
   > > Nobody cares how many petaflops the network is pulling, because the
   > > petaflops can't be put to use somewhere else...
   > > But if the mining was based on cloud storage, a dramatic drop in
   the
   > > price of the currency would result in a dramatic drop in the cost
   of
   > > storing data on the network.
   >
   > i like the idea of "proof of _useful_ work" applied here to storage.
   > if only mining had been applied to BOINC, GIMPS, or *@home efforts...

     The critical feature of the BTC PoW block chain is that the work is
     applied to a believed-computationally-hard problem that is a
     function of
     the block under consideration. This precludes the "work" being a
     function of any other property.

   > surely there is prior art?

     How quickly we forget ... Bitcoin did 4 impossible things before
     breakfast, and now we're whining that it didn't do 5. :)
     In 2008 nobody in the open research community would have proposed
     that a
     peer-to-peer (1) autoscaling (2) computational PoW (3) deflationary
     (4)
     space-conserving cryptocurrency was even theoretically possible.
     Then
     Nakamoto dropped working code and the paper.
     Adding a "useful work" unit to the mining PoW has been considered;
     it's
     extremely hard to do and puts the "useful work" project (whatever it
     is)
     squarely in the line of fire for fraudsters and attacks.
     -andy

References

   1. mailto:joe_wang@yahoo.com
   2. mailto:david.vorick@gmail.com
   3. mailto:adi@hexapodia.org
   4. mailto:cypherpunks@cpunks.org
   5. mailto:cypherpunks@cpunks.org
   6. mailto:adi@hexapodia.org
   7. mailto:david.vorick@gmail.com