Mining for local trust network only block chain

[caston]

Hello,

Before I got into bitcoin I started a CES based Local Exchange System for my city called Perth Community Exchange. (http://www.perth-exchange.org) I have been playing with the idea of migrating away from the CES and towards a new block chain based on modifications to bitcoin. I want to introduce security so that the block chain can only be mined by people that are part of the local signed trust network. E.g. everyone trusts each other through signed public and private key encryption. If you aren't on this network you can't mine. One of the main reasons for this is to keep it local because electricity is very expensive in Perth the other is that I want to encourage mining only using renewable energy such solar, wind, organic waste -> methane -> electricity and even Geobacter (The Electricity Producing Bacteria)  based energy sources.

The initial mining machines would be very low power and thus low hash rate (but will become more powerful with more energy as they move out of proof of concept stage) and forbidden to be attached to the conventional power grid. I'm not yet sure how this will be enforced but a sudden jump in hash rate may alert other miners to verify their trust in their peer network. If they want to use the conventional power grid they can be pointed to regular bitcoin or namecoin.

I would like to see this system as one that could be setup in other parts of the world such as enable a currency system for undeveloped nations. Imagine mining on OLPC over a mesh network using improvised wind power for instance:

http://williamkamkwamba.typepad.com/williamkamkwamba/press.html

They could do this without worry of rich people in developed nations coming in with 4x pcie cards and FPGAs monopolizing their new local currency.

Does anyone have any ideas how I could make mining only available to people on the local trust network?

thanks,

Chris

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[kjj]

Does anyone have any ideas how I could make mining only available to people on the local trust network?

Modify the client to require remote nodes to authenticate.  Then you've reduced the problem to merely key distribution.  A global password is probably too simple.  A centrally managed password database, maybe?  Or a GPG-based web of trust?

[caston]

Probably a web of trust would be better unless every client also doubles as a AAA server but that could cause problems in the case of a netsplit.

I think that in more developed countries the client can connect to the regular internet but perhaps over a VPN with the option of extension via mesh e.g. amateur 802.16x, 802.11x or even radio ham so people can use it without paying a monthly fee for a 4G service. In underdeveloped nations without access to the internet it would be mesh only but later able to connect to the internet. Still handling netsplits would be a major problem because you could end up with forked block chains.

Can bitcoin work without IRC?... perhaps a sneakernet alternative that happens at time of key signing?

To help with verification, keys may also have expiry and require re-signing and verification that they are not using the power grid.

Any excess electricity may actually be offered for sale such as for charging cell phones, torches and all kinds of batteries effectively creating a p2p power grid.

[kjj]

You need a way for a new node to find another node to connect to.  The stock client checks a well known IRC channel, and if that fails, it tries a few hardcoded hosts.

By the way, this is not a trivial problem if you expect this network to be largely isolated from the global internet.

[Mike Hearn]

Bitcoins complexity and the "waste" of electricity are so it can operate in an environment without much trust. If you're going to restrict your network to strongly identified participants using a web of trust, you don't need the block chain. You can just use a regular database. If somebody is found to be attempting/accepting double spends then you evict them from the network.

[kjj]

Bitcoins complexity and the "waste" of electricity are so it can operate in an environment without much trust. If you're going to restrict your network to strongly identified participants using a web of trust, you don't need the block chain. You can just use a regular database. If somebody is found to be attempting/accepting double spends then you evict them from the network.

There is a world of difference between "I trust you to be a local resident" and "I trust you with my financial transactions".

By the way, a clever attacker will set his client to calibrate to the local hashing speed.  The attack you need to watch out for is a dude with a modern Radeon (with more hashing power than the entire rest of your network times 100) will find the hash quickly, and then sit on the result until the last second that still gives him a 95% chance of being first.  Four or five blocks is just a lucky streak, but it buries the bad block pretty deep.

The main line is vulnerable to this type of attack too, except that by getting the whole world involved, the cost of doing can be raised to what we hope is a prohibitive level.

[caston]

There is a world of difference between "I trust you to be a local resident" and "I trust you with my financial transactions".

Good point.  I have another point though that I'll get to next.

By the way, a clever attacker will set his client to calibrate to the local hashing speed.  The attack you need to watch out for is a dude with a modern Radeon (with more hashing power than the entire rest of your network times 100) will find the hash quickly, and then sit on the result until the last second that still gives him a 95% chance of being first.  Four or five blocks is just a lucky streak, but it buries the bad block pretty deep.

The main line is vulnerable to this type of attack too, except that by getting the whole world involved, the cost of doing can be raised to what we hope is a prohibitive level.

I'm not concerned about the guy with the latest ATI Radeon. It's ok to have whatever hardware you want. What's not ok is running it off the existing power grid. At the moment while bitcoin supersedes the banks we are suddenly finding ourselves even more enslaved to a master we didn't even realise we had i.e. the energy utility company. This is especially true when they have a monopoly or duopoly.  

So it is  "I trust you to be a local resident" and  "I trust you that you are generating your own electricity or buying it from those we trust"

I started to get these ideas when posting in the "Which countries have the cheapest electricity? thread" http://forum.bitcoin.org/index.php?topic=2895.msg124775#msg124775

[kjj]

I'm not sure that bitcoin is a good fit for what you need.  It assumes an abundance of power, both electrical and computational.

Bitcoin makes it hard to forge blocks by making each block require as much power as the network can possibly throw at it.  You can't keep people from cheating on your extra rule (no easy access to power) by rewarding them if they do (by having enough power to overwhelm your network).

[caston]

I'm not sure that bitcoin is a good fit for what you need.  It assumes an abundance of power, both electrical and computational.

Bitcoin makes it hard to forge blocks by making each block require as much power as the network can possibly throw at it.  You can't keep people from cheating on your extra rule (no easy access to power) by rewarding them if they do (by having enough power to overwhelm your network).

But then punishing them by invalidating their authentication details. As well don't forget we would deflate far less as the network is smaller and the difficulty level increases so slowly. The cheater wouldn't be a very cunning or lucrative cheat because he would be better off mining bitcoins because they increase in value much faster. However, those that don't have the "easy access to power" that still need a currency that has a slow but steady amount of deflation and is free from usury for the purpose of trade and thus the efficiency that comes with specialization and division of labor.

[kjj]

I'm not sure that bitcoin is a good fit for what you need.  It assumes an abundance of power, both electrical and computational.

Bitcoin makes it hard to forge blocks by making each block require as much power as the network can possibly throw at it.  You can't keep people from cheating on your extra rule (no easy access to power) by rewarding them if they do (by having enough power to overwhelm your network).

But then punishing them by invalidating their authentication details. As well don't forget we would deflate far less as the network is smaller and the difficulty level increases so slowly. The cheater wouldn't be a very cunning or lucrative cheat because he would be better off mining bitcoins because they increase in value much faster. However, those that don't have the "easy access to power" that still need a currency that has a slow but steady amount of deflation compared to the government issued inflationary (or hyper-inflationary) currency for the purpose of trade and thus the efficiency that comes with specialization and division of labor.

But their transactions are still valid, and you have no way of mapping a wallet to a (node authentication) account, so they can still use the coins.  And in the scenario you describe, mining is cheating.  A good cheat won't necessarily crank up and claim every block for himself.  But if he did, would you know?  Would you know who?  The only way to identify which node on the network was the origin of a valid block is if every node attaches to you.

Why not just piggyback on the global system?  They can't compete with the big network, so there will be no free money, but they would still get all of the advantages of the currency.

[MoonShadow]

Does anyone have any ideas how I could make mining only available to people on the local trust network?

You could do it by modifying the client to use a new genesis block, a new port and use an access controlled VPN or darknet.  I don't know why you would want to do this for a local currency, though.  It would be too weak to withstand any of the brute force attacks, even limited to known users via access controls.  If you really want a local currency based off of Bitcoin, then you need to set up a single trusted server that issues one time use signed certs and back that currency up with a Bitcoin reserve.  This way your local currency has, at a minimum, the value of the bitcoins in reserve.

[markm]

What for do you *need* difficulty???

All it is is a waste of energy!

You purport to want to be against waste, don't you?

So how about instead of promoting it by promoting the use of energy-intensive GPU hardware and such, you simply reward people who actually do the nice conservation-oriented behaviors you would like to encourage?

Let the "difficulty" stay at ONE, and instead of encouraging members of your community to "mine" coins, do the mining yourself (possibly a collective self, a cadre or corp or a collection of authorised mints/branches/whatever, using "nice" (lower priority execution of computation) to keep total "difficulty" at ONE even if many physically separated CPUs are in use to run the system).

Give out the "mined" coins to people who conserve electricity, lower carbon emissions, or whatever behavior you want to reinforce.

Doesn't it make more sense to reward conservation measures than to reward "competing to see who can waste more electricity faster"?

Optionally, adjust the rate at which "minting" of coins decreases to lower the number of years it will take to get the full end total number of your coins into circulation.

Once they are all in circulation (or possibly even just when some teeter-totter critical amount are in circulation) you can then open up the network to the "waste more electricity than your neighbor to make more transation fees than your neighbor" model but seriously is that really a model that even accords well with your overall supposed goal(s)

-MarkM-

[caston]

Does anyone have any ideas how I could make mining only available to people on the local trust network?

You could do it by modifying the client to use a new genesis block, a new port and use an access controlled VPN or darknet.  I don't know why you would want to do this for a local currency, though.  It would be too weak to withstand any of the brute force attacks, even limited to known users via access controls.  If you really want a local currency based off of Bitcoin, then you need to set up a single trusted server that issues one time use signed certs and back that currency up with a Bitcoin reserve.  This way your local currency has, at a minimum, the value of the bitcoins in reserve.

I would like to keep it as p2p as possible. Especially as this project has an additional goal to the bitcoin project: to enable to creation of a peer 2 peer energy grid.

[caston]

I have a few others points as well. Many miners compete with miners that are sponging other peoples power. It could be their parents or their employers or the power provided to their dorm building or their prison cell whatever. In the long term those miners may find that people wake up to them and they can't be fooled forever and they lose that "free power". In the short term its unfair to people who are paying for their electricity.

Also consider that someone that is paying for their own electricity still has observe the limitations of supply due the monopoly energy provider model being so inefficient. For instance if we have a heat wave or a frost wave and everyone is turning on their air-conditioning or heating all at once the central energy utility isn't going to like people using up so much juice just to mine bitcoins.

The people that have to observe those limitations of supply often find they need to generate their own power. For example I did IT support for a very small hydraulics business and the power grid could not supply enough energy for their needs when they were running some of their heaviest machinery so they had to run a diesel generator.

You may find that regular bitcoin miners start looking these alternatives as well. e.g. they want a means of generating their own electricity both in a cheaper and higher capacity that the energy utility can give them.

The next point is that those with cheap electricity are likely not being charged for the externalities of that cheap electricity such as the environmental damage of processes such as coal gas mining (fracking).

People may want to choose a currency where all the costs are upfront and accounted for and there's no hidden costs of finding out that the ground water in another community has been ruined for thousands of years and the people that indirectly consume that water through the local agriculture are now facing enormous health problems. You then end up with food shortages because no one wants to eat food produced in these farms where the gas was mined or the farms can no longer produce food either for environmental or economic reasons such as denial of capital to land the banks won't lend on due them being tied up in mining concerns. You may also see the displacement of people from their land and wonder if your next.

People may not want to accept a crypto currency unit that has high external costs for the same reason you might stop buying McDonalds if you get annoyed because you find a large amount of McDonalds rubbish littering your street.

So to sum it all up although it may seem like a massive pain in the butt to have to make your own power instead of just plugging it into the wall socket I hope that it helps boot strap local renewable energy technologies and the foundations of a peer to peer power grid.

[caston]

What for do you *need* difficulty???

All it is is a waste of energy!

You purport to want to be against waste, don't you?

So how about instead of promoting it by promoting the use of energy-intensive GPU hardware and such, you simply reward people who actually do the nice conservation-oriented behaviors you would like to encourage?

Let the "difficulty" stay at ONE, and instead of encouraging members of your community to "mine" coins, do the mining yourself (possibly a collective self, a cadre or corp or a collection of authorised mints/branches/whatever, using "nice" (lower priority execution of computation) to keep total "difficulty" at ONE even if many physically separated CPUs are in use to run the system).

Give out the "mined" coins to people who conserve electricity, lower carbon emissions, or whatever behavior you want to reinforce.

Doesn't it make more sense to reward conservation measures than to reward "competing to see who can waste more electricity faster"?

Optionally, adjust the rate at which "minting" of coins decreases to lower the number of years it will take to get the full end total number of your coins into circulation.

Once they are all in circulation (or possibly even just when some teeter-totter critical amount are in circulation) you can then open up the network to the "waste more electricity than your neighbor to make more transation fees than your neighbor" model but seriously is that really a model that even accords well with your overall supposed goal(s)

-MarkM-

Mark,

I don't think we need to reward people for altruistic behavior or punish them for not being a super greenie. I don't think its in the nature of individuals to cause the type of environmental damage that we see today.
This damage is done by big industry and big government and we all work to stay alive by being organized in hierarchical structures controlled at the top by power hungry psychopath CEOs. If we want to stop this damage the idea is not to neuter and make you and me the spinning image of Ghandi and mother Theresa. We need to decentralize the power so that it is now longer in the hands of  closed and unaccountable monopolistic, corporate and bureaucratic entities and allow it to be used and managed by the wider public through the distribution and democratization of the means of producing electricity.

[Anonymous]

Cant you just "generate" all of the required coins within the genesis block ?

[caston]

Cant you just "generate" all of the required coins within the genesis block ?

Then what would be the incentive for people to build 1000w windturbines?

I'm kind of a starting to get a picture of how this may look. At the moment it is illegal to run power cables across property lines so to begin with the only uses of power would (assuming you are not selling it to the energy utility) would be
1) generate crypto currency
2) generate electricity for domestic use
3) generate electricity for production e.g. run a reprap
4) sell as a battery charging service e.g. electric cars, electric bikes mobile phones, notebook bateries

You would work out how much you make from generating (or mining) crypto currency and set your battery charging service higher so that it was worthwhile you allow people to come in and charge up their EV or e-bike. You would also do the same for electricity used for production.

This is where it gets tricky though because if one guy only wants to make stuff with his reprap all day long and doesn't care for mining or making power he would need to buy the power and sell things he makes with his reprap to get more cryptocurrency but even if his next door neighbor is happily generating power he can't just run a cable between his fence and his neighbors fence because that would be illegal. So at some point though people are going to find places where they can do this for instance in rural areas between large farms or there may be ways around it such as transmitting electricity wirelessly like Tesla advocated.  People may even design new communities from the ground up with peer to peer power grids.

You may also report your power production capacity and usage to the grid. For instance if you have 5 1000w wind turbines you would report how active they are more much energy they are really producing. You would also report what you are using this energy for e.g. if you are mining coins but you are willing to make the energy available for other purposes such as a mobile phone battery recharge station. That way if people are likely to need electricity for the purposes of production they can survey their area to find out how much is available to them and how much it will cost.

Initially without the p2p electricity grid an electricity producer may offer co-location services. e.g. you can bring in your reprap or your mining rig and leave it at the electricity producers property and you pay the electricity producer for this service but you only do so if you are making more from mining cryptocurrency than it costs you for the co-location and access to electricity.  This saves the miner from investing in and maintaining electricity producing gear and saves the electricity producer from investing in and maintaining mining gear so we do have some specialization and division of labor. Of course there is nothing to stop each of them from doing both.

It may even progress beyond electricity and actually become a peer 2 peer photonics grid. First this would be simply for communication but at some stage we may be able to power devices (or even computational circuits) entirely from light.

http://en.wikipedia.org/wiki/Photonics