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Author Topic: Proposal: An Alternative Currency that doesn't "waste" energy  (Read 4222 times)
mckoss
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December 05, 2011, 11:23:07 PM
 #1

Though I love the Bitcoin protocol, and it's elegant solutions to double-spending and cheating, it still bothers me that it takes a prodigious amount of energy to mine for new currency (something like 25 Megawatts are being consumed by miners right now).  So I've been trying to think of ways to substitute a less costly process for the current hashing problems required by BitCoin.

If you think of mining as a form of lottery, each computation of a nonce hash is like buying one "ticket" - the more tickets you buy, the higher the probability of your winning the 50 BTC+ prize.  Why don't we replace mining with a more DIRECT lottery?

Every 10 minutes, say, each person that wants to participate buys how every many tickets they want (using the same currency), and then the winner is chosen randomly such that your odds of winning are proportional to your ticket purchases.  The winner not only receives the 50 coin bounty in the block, but also all the tickets purchased in the block.

This has the same incentives and rewards as Bitcoin, but reduces the net cost of "mining" to near zero (all the "costs" of mining are returned to the winner of the block).  It's "fair" since your chance of winning is proportional to the amount of coin you risk in each auction.  A simplification is to treat the amount of "tip" included in each transaction as the "ticket purchase" amount (you can enter a NULL transaction with a tip in any block when you want to mine, but not sending a real transaction).

The remaining problems to solve are:
  • How to fairly decide the winner of the lottery (without relying on trusted 3rd party).
  • How to decide that an accepted block is "canonical".

The first problem can be solved by hashing all the user addresses of the ticket purchases in the block, and using that as a seed to a cryptographically secure random number generator.

The second problem feels non-trivial to me and still a source of possible cheating.  Any ideas?

Has this all been discussed before???


Mike Koss
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steelhouse
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December 05, 2011, 11:35:25 PM
 #2

solidcoin already figured this out mostly, cpu mining
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December 05, 2011, 11:40:42 PM
 #3

solidcoin alrwady figurd this out mostly, CoinHunter mining
FTFY
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December 05, 2011, 11:48:51 PM
 #4

I've seen similar proposals, but none with the lottery ticket idea. Two main concerns:
1) Currently the "wasted" electricity helps secure the network by making it equally expensive to brute force attack. You touched on this with your second bullet point, it's a biggie.
2) New users would need to buy coins from existing users. Since one on average would profit everyone would play this lottery in pools, it basically accomplishes the same thing as pure deflation but with more risk and complexity. We might as well just stop subsidizing coin generation.
mckoss
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December 06, 2011, 12:04:35 AM
 #5

I've seen similar proposals, but none with the lottery ticket idea. Two main concerns:
1) Currently the "wasted" electricity helps secure the network by making it equally expensive to brute force attack. You touched on this with your second bullet point, it's a biggie.
2) New users would need to buy coins from existing users. Since one on average would profit everyone would play this lottery in pools, it basically accomplishes the same thing as pure deflation but with more risk and complexity. We might as well just stop subsidizing coin generation.

Isn't the the subsidy is a useful incentive for managing/securing the block chain?

And yes, there's a big hole in the scheme until 2 is solved.  There has to be an unbiased way to decide between competing block chains (perhaps by preferring chains that have the most ticket value spent in them).  But we need the equivalent of the secure timestamping service that Bitcoin includes.

Mike Koss
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Explodicle
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December 06, 2011, 12:18:01 AM
 #6

Isn't the the subsidy is a useful incentive for managing/securing the block chain?

It is, but having everyone play the lotto doesn't manage or secure anything. Smiley
cbeast
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December 06, 2011, 02:17:39 AM
 #7

I think it's a non issue. By the time Bitcoin has a substantial user base, there will be technological solutions to energy efficiency.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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December 06, 2011, 05:28:21 AM
 #8

This is basically the concept of mining through 'proof-of-stake' rather than 'proof-of-work'. I think 'proof-of-stake' would be superior to 'proof-of-work'.

I have some posts about it. Try searching for 'stake'.  I suggested a deterministic system rather than a lottery system. I don't think a lottery is any better or worse than a deterministic system.

Most people don't care about this or are too busy with other things. Other forum members are not capable of offering intelligent comments.

Is there something to be gained from re-opening a discussion with them?

What is really needed is for someone with serious programming skills to create the improved system.
I would be delighted to offer some input to this individual. However, if a willing programmer exists, then he will probably be too much of a neckbeard megalomaniac to accept my input.

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ahimsa
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December 06, 2011, 05:38:05 AM
 #9

Why don't we replace mining with a more DIRECT lottery?

Please describe a Lottery system that is free? How exactly does such a system work Huh? 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?Huh

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

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

steelhouse
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December 06, 2011, 06:55:57 AM
 #10

I think it's a non issue. By the time Bitcoin has a substantial user base, there will be technological solutions to energy efficiency.

there are probably already dozens of fpga miners out there.  Reduced miner reward will help.
mckoss
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December 06, 2011, 07:00:39 AM
 #11

This is basically the concept of mining through 'proof-of-stake' rather than 'proof-of-work'. I think 'proof-of-stake' would be superior to 'proof-of-work'.

I have some posts about it. Try searching for 'stake'.  I suggested a deterministic system rather than a lottery system. I don't think a lottery is any better or worse than a deterministic system.

Most people don't care about this or are too busy with other things. Other forum members are not capable of offering intelligent comments.

Is there something to be gained from re-opening a discussion with them?

What is really needed is for someone with serious programming skills to create the improved system.
I would be delighted to offer some input to this individual. However, if a willing programmer exists, then he will probably be too much of a neckbeard megalomaniac to accept my input.


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).

Mike Koss
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mckoss
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December 06, 2011, 07:05:03 AM
 #12

Why don't we replace mining with a more DIRECT lottery?

Please describe a Lottery system that is free? How exactly does such a system work Huh? 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?Huh

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

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



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.

Mike Koss
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crazy_rabbit
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December 06, 2011, 08:45:34 AM
 #13

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


Why don't we replace mining with a more DIRECT lottery?

Please describe a Lottery system that is free? How exactly does such a system work Huh? 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?Huh

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

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



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.

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December 06, 2011, 10:25:31 AM
 #14

and then the winner is chosen randomly

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

Edit to clarify:

The first problem can be solved by hashing all the user addresses of the ticket purchases in the block, and using that as a seed to a cryptographically secure random number generator.

Where would this random number generator reside?
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December 06, 2011, 02:04:01 PM
 #15

"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'?

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December 06, 2011, 02:17:00 PM
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This will amplify one of the most undesirable effects of capitalism : you can't make money if you don't already have money.
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December 06, 2011, 02:49:22 PM
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This thread is so fail, where is the "proposal"? No, saying "let's make something different" is not a proposal
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December 06, 2011, 03:30:36 PM
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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  Smiley

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 Wink , 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.

"Bitcoins are for the most part as useless as they ever were."
 - Edward50
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December 06, 2011, 04:02:26 PM
 #19

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.

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.
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December 06, 2011, 04:19:10 PM
 #20

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

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).

Mike Koss
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