Thanks for the analysis. I have a few replies to your points
I think this is problematic, if not impossible, to implement.
There are many services on the internet which have people (and also computer algorithms, for the easier ones) solve captcha's for you for a very small amount of money. And even if a block is solved approximately every 30 seconds, a human can solve multiple captchas during that timespan.
And then of course you have the issue of where the captcha's come from: If one server designs them, then the currency is no longer decrentralized. If every node can come up with the captcha on its own, what prevents tinkerers to exploit the captcha-generation code to solve them automatically?
A captcha is a known message that is relayed to another entity in a way that only humans should be able to interpret it. Thus, the service creating the captcha already knows the answer, and could skip the process entirely.
~W-M
I just found out about verifiabling computing
http://research.microsoft.com/apps/pubs/default.aspx?id=180286, from this thread:
https://bitcointalk.org/index.php?topic=277389.0 which might solve at least the technical problems. Each client, when solving a block, could add a catchpa to an image using a fixed algorithm with random seed data, and use verifiable computing to prove that it followed the rules. As new and better catchpa generators are invented, they could be implemented in upgrades.
There is only one catpcha per block, and the cost of paying someone, even a cent per captchpa, would be higher than electricity costs, and as there is only one catchpa to solve, every say 5 minutes, it would be very inefficent to pay someone for just solving 12 catchpas per hour.
To stompix: I think it would easy to generate lots of workers to get around any fixed limit on hashing power. As they are all anonymous, detecting multiple workers from one individual wouldmbe hard.
Lololo3: yeah, this is exactly the direction I want to go in. The whole system is to extend the dogecoin fun model for cryptocurency. But dogecoin was heavily mined by the old rigs from litecoin/bitcoin miners, which kind of broke it.