Monetizing the network

[gusti]

I understand that the bitcoin network has already become the biggest and fastest supercomputer ever built.
Corporations, universities and govt do pay for the use of this kind of supercomputers everyday.

Surely, there must be different options to run paid jobs over the network, in order to make investments less risky, and help the bitcoin value go up, too.

Any ideas ?


   

[kiba]

I think that would require modification to the pooling software or the mining software...or something..

[Gryph]

I think the modifications would be at he mining software level. I don't think they would be at the pooling software level.

The miners would have to somehow run code belonging to the "entity" (i have no better name for them right now so bear with me). A way of switching between mining and entity code, preferably automatically, would be needed.

Somehow a type of bidding system needs to be set up so that Entities out bid each other for miner time. The miners would set minimum rates, and the entities would have to first outbid the current profitability of bitcoin mining, the miner's minimum rate, and then outbid each other, then their code runs.

So if bitcoin crashes then the miners switch over to getting paid for entity work. if Bitcoin becomes insanely profitable the miners switch back and the entities either raise their bids, or wait out until more miners come to push the difficulty and push down profitability.


Ofcourse some miners may prefer helping entities than making profit so they might allow code to run for less than market price.

[PiGames]

I understand that the bitcoin network has already become the biggest and fastest supercomputer ever built.
Corporations, universities and govt do pay for the use of this kind of supercomputers everyday.

Surely, there must be different options to run paid jobs over the network, in order to make investments less risky, and help the bitcoin value go up, too.

Any ideas ?


   

Pretty interesting idea..
So you're saying we could 'subsidize' the electricity costs of our mining rigs by offering a % of our hashing power to a 3rd party buyer for unrelated computations?

[BioMike]

Or have just a distributed computing project (aka seti@home, folding@home, etc.) started that pays bitcoins for the work.

[N12]

Surely, there must be different options to run paid jobs over the network, in order to make investments less risky, and help the bitcoin value go up, too.

The Bitcoin value would go up because there is demand created for Bitcoin to pay with it for computing power? Interesting.

[gusti]

I understand that the bitcoin network has already become the biggest and fastest supercomputer ever built.
Corporations, universities and govt do pay for the use of this kind of supercomputers everyday.

Surely, there must be different options to run paid jobs over the network, in order to make investments less risky, and help the bitcoin value go up, too.

Any ideas ?


   

Pretty interesting idea..
So you're saying we could 'subsidize' the electricity costs of our mining rigs by offering a % of our hashing power to a 3rd party buyer for unrelated computations?

Not only subsidize, but selling computational power and profit from that. If you do own the fastest supercomputer in the world, that may have a market value, doesn´t it ?   

[gusti]

Surely, there must be different options to run paid jobs over the network, in order to make investments less risky, and help the bitcoin value go up, too.

The Bitcoin value would go up because there is demand created for Bitcoin to pay with it for computing power? Interesting.

I suppose it will go up, or at least may drive difficult down, as this paid computing power will compete with mining itself.

[TradersEdgeDice]

Or have just a distributed computing project (aka seti@home, folding@home, etc.) started that pays bitcoins for the work.

Excellent idea.  Miners would always be in business.  No subsidizing anything.  They are other in one business or another.  Bitcoin legitimacy would be secure.

If they want the power, they deal with bitcoin.

The greatest works around the world were done in the deflationary money system called "gold." :-) Empire State Building in the SR 71 Blackbird come to mind in the pre-fiat era.

I like it.

[galaxyAbstractor]

But I thought the mining was to verify transactions, which creates coins? I may have misunderstood an article about it though... Anyway, if the computation power would be used for research, who would verify payments and create coins?

[Meni Rosenfeld]

1. A distributed network has high communication latency.
2. A network node can misuse the data you send for the calculation.
3. A network node can send you wrong calculations results to sabotage you.
4. A network node can pretend to do work to take your money.
5. A network node has hardware unoptimized for your computing task.

The Bitcoin mining protocol has very specific features that make some of these points moot. The Bitcoin network is very far from being a drop-in replacement for supercomputers. Going forward people will probably come up with ways to use it they are willing to pay for, but there aren't currently any organizations waiting to dump money on something like this. If there were, they'd be all over the people who do folding@home.

But I thought the mining was to verify transactions, which creates coins? I may have misunderstood an article about it though... Anyway, if the computation power would be used for research, who would verify payments and create coins?

Some of the computational power will still go to mining. This will actually increase the difficulty, because for a given difficulty level the reward is at worst the same and the risks much lower.

[gusti]

1. A distributed network has high communication latency.
2. A network node can misuse the data you send for the calculation.
3. A network node can send you wrong calculations results to sabotage you.
4. A network node can pretend to do work to take your money.
5. A network node has hardware unoptimized for your computing task.

The Bitcoin mining protocol has very specific features that make some of these points moot. The Bitcoin network is very far from being a drop-in replacement for supercomputers. Going forward people will probably come up with ways to use it they are willing to pay for, but there aren't currently any organizations waiting to dump money on something like this. If there were, they'd be all over the people who do folding@home.

/end quote

Good points. Not suggesting the network may replace the supercomputers, but give an alternative to them, and many orders of magnitude cheaper. And if the network is good at doing mining, is almost sure that more applications that fit can be found.

[gigitrix]

It's a great idea, but realistically this is a goal that is served by BOINC. It would be interesting to see how finance fits into that, but it's a separate (and huge) project that is better served by the developers of custom mining software. They would essentially build BOINC again, except instead of the Long Workunits you'd assume 100% internet connectivity and constant reporting. But really bitcoin would only come into it as a currency or "score" mechanism, so this isn't really bitcoin's problem to solve.

Additionally I can't think of many cases where a business needs "raw numerical computation" like this outside of very specialised examples (or possibly people who want to crack crypto, but that opens other cans of worms )

[MacRohard]

I understand that the bitcoin network has already become the biggest and fastest supercomputer ever built.
Corporations, universities and govt do pay for the use of this kind of supercomputers everyday.

Surely, there must be different options to run paid jobs over the network, in order to make investments less risky, and help the bitcoin value go up, too.

Any ideas ?


   

bitcoin doesn't lend itself to doing any other kind of work.. what could happen is that governments, corporations or universities could approach the big mining pools and ask them to run their own software instead for a higher return.. so yea.. could happen, but it has nothing to do with bitcoin really.

[marcus_of_augustus]

Great, someone is trying to pimp the bitcoin network out like a cheap whore.

You got a gold-plated secure system for transferring monetary information signals all around the planet and you want to do what with it exactly?

I cannot think of a more needed application for a computer network than objectively distributing pricing signals, ideally suited also .... shall we stay focussed until we get this one in the bag?

It is not some kind of botnet that can go to the highest bidder .... although each miner is free to choose what to run on their personal clusters. Any global change to the network computation goals/behaviour as an entity would be objectionable, imo.

[Meni Rosenfeld]

Great, someone is trying to pimp the bitcoin network out like a cheap whore.

You got a gold-plated secure system for transferring monetary information signals all around the planet and you want to do what with it exactly?

I cannot think of a more needed application for a computer network than objectively distributing pricing signals, ideally suited also .... shall we stay focussed until we get this one in the bag?

It is not some kind of botnet that can go to the highest bidder .... although each miner is free to choose what to run on their personal clusters. Any global change to the network computation goals/behaviour as an entity would be objectionable, imo.

There is no global change in the network goals. It's just more stuff people with computing hardware can do. It's unrelated to Bitcoin, but as I explained, it will have the side effect of strengthening the Bitcoin network.

Providing the backbone for the world's future monetary system is very important, but people need computing power for other stuff too. What good is money, if no value is created to be exchanged for it?

[tiberiandusk]

But I thought the mining was to verify transactions, which creates coins? I may have misunderstood an article about it though... Anyway, if the computation power would be used for research, who would verify payments and create coins?

Mining verifies the transactions. The horsepower is used to ensure that the block of transactions isn't fraudulent and that coins aren't being double spent. Coins aren't created. All of them exist in the system's code. They are just given out at a specified rate, decreasing towards zero, as a reward for helping run the network and to get them into circulation.

[marcus_of_augustus]

What good is money, if no value is created to be exchanged for it?

I read this more than 3 times, it is nonsensical, sorry.

I'd be looking suspiciously at any mining pool operator that wants to push out extra work unrelated to Bitcoin mining. It's apparently not straightforward just keeping the pools secure and up as it is ... the pools are not a necessity for the Bitcoin network, just another layer, a soluble one.

[Meni Rosenfeld]

What good is money, if no value is created to be exchanged for it?

I read this more than 3 times, it is nonsensical, sorry.

Money can be exchanged for goods and services. If there are no goods and services in the world, what do you use the money for?

You seemed to be implying that people everywhere need to stop creating anything and devote all the world's resources to operating Bitcoin. This is of course nonsensical, people need to create a wide variety of valuable things. Some of these things may require grid computing. There's no reason not to have in existence other grid computing projects, paid or otherwise. Again, this is unrelated to Bitcoin itself.

I'd be looking suspiciously at any mining pool operator that wants to push out extra work unrelated to Bitcoin mining. It's apparently not straightforward just keeping the pools secure and up as it is ... the pools are not a necessity for the Bitcoin network, just another layer, a soluble one.

Right now AFAIK all pools are done as a hobby or a side business. Going forward mining pools will be serious business and the issued involved will be worked out. The premise of the OP is something that will take years to manifest.

We're definitely not talking here about a pool operator who tricks his users who signed up for just Bitcoin mining by diverting resources to other endeavors (at least, I wasn't). We're talking about the general possibility of alternative computing targets, regardless of specific implementation details, with or without anything to do with a Bitcoin mining pool service.

If you prefer to provide your compute power to a dedicated Bitcoin mining pool, be my guest. Personally I will seriously consider a hypothetical service which provides some combination of mining with other paid activities.

[marcus_of_augustus]

You seemed to be implying that people everywhere need to stop creating anything and devote all the world's resources to operating Bitcoin.

You inferred ... I neither said, implied, nor meant any such thing.

You have twisted the discussion away from the original assertion that specifically reference the bitcoin network by flipping between networks generally and the bitcoin net. specifically ...  I protested that bitcoin should stick to its knitting, and now you agree with me and suggest I'm the curmudgeon ... huh?

Enough of this already I think ... either we are at cross-purposes here or you are being a slippery bastard.