Crypto currency and solving real world problems

[kolleamm]

There are specialized hardware units called ASICs. They perform some computation to mine crypto currency, such as Bitcoin. The computational problems they solve however (as far as I know) have no real world use and are done just for the sake of mining the virtual coin.
There are organizations however, like the World Community Grid, to which you can donate your computational power to solve real world problems.

So why don't computers solve real world problems instead and profit from it as well?

 

[phinds]

So why don't computers solve real world problems instead and profit from it as well?

Explain the business model that makes that more profitable than coin mining.

 

[kolleamm]

Explain the business model that makes that more profitable than coin mining.

It's simple, rather than run an arbitrary algorithm you run a useful one.

 

[phinds]

It's simple, rather than run an arbitrary algorithm you run a useful one.

No, explain the BUSINESS model that makes that more profitable than mining coins. You're just spouting words with no effective content.

 

[kolleamm]

No, explain the BUSINESS model that makes that more profitable than mining coins. You're just spouting words with no effective content.

It's still coin mining, except the mining process would this time involve algorithms that solve real world problems.

 

[Keith_McClary]

There are many cryptocurrencies. Is there a cryptocurrency whose mining produces useful byproducts? Someone must have thought of this already. Does disproving hypotheses in number theory count as "useful"?

 

[kolleamm]

Is there a cryptocurrency whose mining produces useful byproducts?

Not that I know of. I'm guessing no one bothered to think of the byproduct it could produce and rather they focused solely on the financial aspect. I don't see any reason why it wouldn't work. Why run an algorithm that guesses numbers when you could run one that computes a 3D simulation and the user still gets rewarded?

 

[Baluncore]

Why run an algorithm that guesses numbers when you could run one that computes a 3D simulation and the user still gets rewarded?

The computers that mine cryptocurrency economically are purchased as plant specifically for the cryptocurrency earnings. Why would anyone purchase computers if they would not pay for themselves? Mining cryptocurrency is less environmentally damaging than using the same capital to fund the mining of coal or copper.

I generate excess PV power during the day. The price I can get from the power company for my excess is less than I can make mining cryptocurrency with my GPU and excess power. Do you have a more economic suggestion for me?

 

[phinds]

It's still coin mining, except the mining process would this time involve algorithms that solve real world problems.

You're still just spouting words with no actionable meaning.

Give a SPECIFIC case where this could be more profitable than mining coins. You're just hand waving with no meaning.

 

[Baluncore]

There are organizations however, like the World Community Grid, to which you can donate your computational power to solve real world problems.

When you volunteer your PC or laptop's unused time to World Community Grid (WCG), created by IBM, you must pay for the increased electrical power used. How do you know the WCG owners are not mining cryptocurrency for themselves, while you are paying for it? Do you trust the IBM Corporation that much; or whoever purchased the WCG from IBM?

 

[kolleamm]

Do you trust the IBM Corporation that much; or whoever purchased the WCG from IBM?

WCG was just an example, trust is a whole other topic.

Yes I understand that the units to mine crypto are built specifically for that task, but task versatile tech can be built as well if that's what the problem demands, in short tech can adapt.

You're still just spouting words with no actionable meaning.

Give a SPECIFIC case where this could be more profitable than mining coins. You're just hand waving with no meaning.

I'm doing my best to explain it, you're just repeating yourself.

 

[phinds]

I'm doing my best to explain it, you're just repeating yourself.

Exactly. You are repeating yourself so I am making the same statement in response to your non-answers.

You seem to think you have a good idea here but you have made absolutely no statements of how it could work in practice so you are continuing to just make hand-waving statements.

Again, give a SPECIFIC example of how it could be profitable.

 

[jack action]

The computational problems they solve however (as far as I know) have no real world use and are done just for the sake of mining the virtual coin.

This is where you err:

How To Mine Bitcoins
Miners are getting paid for their work as auditors. They are doing the work of verifying the legitimacy of Bitcoin transactions. [...] By verifying transactions, miners are helping to prevent the "double-spending problem."

Double spending is a scenario in which a bitcoin owner illicitly spends the same bitcoin twice. [...]

[...]

Mining and Bitcoin Circulation
In addition to lining the pockets of miners and supporting the bitcoin ecosystem, mining serves another vital purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically "minting" currency.

The cryptocurrency concept revolves around the fact that all transactions are in a public ledger that anyone can access. Miners are constantly verifying that nobody tampers with the information in that ledger. Since anyone can do this job, many miners are constantly competing against each other, verifying other people's work. Doing the work is rewarded by cryptocurrency, i.e. currency that is added to the ledger or - in other words - newly "mined".

 

[Vanadium 50]

It appears that the OP misunderstands what the blockchain "proof-of-work" is, and may be clinging to this misunderstanding.

(1) The calculation done by the miners is useful work to the cryptocurrency. It does what by hand would be called "keeping the books" - it is continuously verifying the ledger. Beyond this, it is not useful work for society as a whole.

(2) People buy/build computers to mine bitcoin. They do it to solve "interesting problems". They do it to make money some other way. They do it to play games, or play music, or visit PF. But the person who buys the computer gets to decide what it is used for.

 

[kolleamm]

This is where you err:

The cryptocurrency concept revolves around the fact that all transactions are in a public ledger that anyone can access. Miners are constantly verifying that nobody tampers with the information in that ledger. Since anyone can do this job, many miners are constantly competing against each other, verifying other people's work. Doing the work is rewarded by cryptocurrency, i.e. currency that is added to the ledger or - in other words - newly "mined".

So you're saying that crypto currency is mined by miners constantly verifying the data on the blockchain? I thought it was mined by algorithms guessing numbers until they've reached the correct one thus earning a block reward? (correct me if I'm wrong)

 

[Vanadium 50]

correct me if I'm wrong

Well, since you asked...

crypto currency is mined by miners constantly verifying the data on the blockchain?

Yes.

 

[jack action]

So you're saying that crypto currency is mined by miners constantly verifying the data on the blockchain? I thought it was mined by algorithms guessing numbers until they've reached the correct one thus earning a block reward? (correct me if I'm wrong)

Although not an expert in the field, I think the guessing part is just to create a 'lottery' to encourage many people of doing the same work over and over again. Every guess requires to do the auditing work (thus having many auditors, but only one gets paid).

 

[kolleamm]

Yes.

Welp so much for my idea lol

 

[russ_watters]

Allow me to break this loop:

There are specialized hardware units called ASICs. They perform some computation to mine crypto currency, such as Bitcoin. The computational problems they solve however (as far as I know) have no real world use and are done just for the sake of mining the virtual coin.
There are organizations however, like the World Community Grid, to which you can donate your computational power to solve real world problems.

So why don't computers solve real world problems instead and profit from it as well?

You're still just spouting words with no actionable meaning.

Give a SPECIFIC case where this could be more profitable than mining coins. You're just hand waving with no meaning.

The direct answer to your question is that there's no money in the problems you donate your computer power to solve, so it isn't possible to profit from them. More broadly, that's what "donating" means. It's like asking why you can't profit from donating to charity -- it's a contradiction.

Perhaps there is a business problem that could use the same computing model and share in the profits, but I wouldn't think most businesses would be willing to outsource to the general pubic in that way. It carries risk. Maybe someone will come up with a model though...

For example, let's say I'm rendering a CGI Hollywood movie. I could buy/lease a render farm, but instead maybe I can get the general public to render it for me on their PCs. Would they donate their time so I can profit? Probably not. Again, pretty much by definition the donated-time tasks are non-profit, societal good tasks. Asking someone to donate so I can profit is just greedy. Unless we can share the profit. But that would be a hard sell, because the individual contributions to the task are likely exceedingly small. If I get a million users to donate a week of computer time and pay each $10, is that really enough money for them to care and bother with it? I think it's more likely that the profit potential for the users is so small it is hard to differentiate it from donating.

Either way, as @phinds says, you need a business model. I won't research for you either, but it should be possible for you to figure out in a few minutes of googling how much computer power it takes to render a CGI movie and how much it costs (not the art/animation, the actual rendering). Then divide by the projected number of users to find how much you could pay them.

 

[LucasB]

I think that if you're asking for a "business-model" you didn't understand what the OP asked. Let me rephrase it:

"How cool would it be if instead of wasting all this CPU power, the computational problem that is the origin of a bitcoin hash could be something useful, like calculations needed by research projects that will advance humanity, or something like that?"

A similar question in Bitcoin Stack Exchange: Is there a way to set up proof-of-work systems so they would be even more useful?

 

[phinds]

"How cool would it be if instead of wasting all this CPU power, the computational problem that is the origin of a bitcoin hash could be something useful, like calculations needed by research projects that will advance humanity, or something like that?"

In other words, instead of trying to make money, why doesn't everyone just do everything for free. Good luck with that.

 

[LucasB]

In other words, instead of trying to make money, why doesn't everyone just do everything for free. Good luck with that.

You'd still make money, but instead of using the computational power to solve fictitious problems that don't do anything, it would be used to solve real-world computational problems to produce a coin.

Well, one compelling argument against this idea is in verifying that the solution is correct, since no one knows it, not even the asker.

 

[phinds]

You'd still make money

No, you wouldn't. The coin community would have zero reason to compensate you in any way since you would have done nothing of direct value to them.

You're imagining a utopian pipe dream where people would give you money because your such a nice guy and all, having spent a lot of money on a powerful computer just so you could do something that has nothing to do with them. Dream on.

 

[LucasB]

No, you wouldn't. The coin community would have zero reason to compensate you in any way since you would have done nothing of direct value to them.

You're imagining a utopian pipe dream where people would give you money because your such a nice guy and all, having spent a lot of money on a powerful computer just so you could do something that has nothing to do with them. Dream on.

Just to be clear, I don't want to have one of those internet discussions that look more like a bar wrangling, but for the sake of clear communication:

Employing computational power to brute-force a hash and actually succeeding in doing so has nothing to do with money. We arbitrarily assigned a monetary value to this process. The focus of the discussion has nothing to do with money, but on the computational problems that the Bitcoin network poses for the "mining" process (or, in other words, brute-forcing to find a hash), and turning this computation power that is already being done into something useful, without interfering with anything else of how Bitcoin works. Obviously that's wishful thinking, but that's the question OP asked. So, when we ask for a "Business Plan" for instance, I think we are missing the purely theoretical, technical, point of the question.

 

[jack action]

The coin community would have zero reason to compensate you in any way since you would have done nothing of direct value to them.

What reason has the coin community to compensate a miner doing the same computation over and over again until that miner gets a number below an arbitrarily set limit, when the number found with the first computation was already the answer the coin community was looking for?

Why would they care less if, after finding the number needed, instead, that miner tried to find a new star, design a new molecule, or run google searches?

The goal is to create a non-related-to-mining race between miners where only the first to finish will get paid, while everybody can still see that all competitors give the same answer.

If miners could do useful work instead, they could charge both the coin community AND the people who gave them problems to solve.

As @LucasB said, it is not a question of "business model"; this is the real problem to address:

one compelling argument against this idea is in verifying that the solution is correct, since no one knows it, not even the asker.

 

[Baluncore]

There is an equilibrium of “numerical processor allocation”, between “numerical research” and “cryptocurrency mining”. That balance is determined significantly by the rate of remuneration. The competition will be decided by the price the two competitors are prepared to pay for the resource. As I see it, the price has risen to what the market can stand.

But the remuneration is paid in different currencies, so a dynamic exchange rate will sway the equilibrium. Maybe a crash in the value of cryptocurrency will swing the balance. Another way would be to put a more realistic dollar value on “numerical research”. A bag of cold cash may outweigh a warm glow.

 

[anorlunda]

and turning this computation power that is already being done into something useful

How about not use the electric power, and not load the power grid, and not generate so much power, to not generate so much environmental impact? (Sorry for the run-on sentence.) That's probably more benefit to the world than finding a worthy computational problem.

 

[kith]

I think the question of @kolleamm is well worth asking.

In the Bitcoin protocol, the mining process involves the computation of hashes with a certain number of leading zeros. The result of this computation has worth for the integrity of the blockchain but it is meaningless outside the blockchain. Can we devise a different protocol where the results of the computations in the mining process both ensure the integrity of the blockchain and are meaningful outside the blockchain?

In an ideal world, we could use computations which would be done in any case. This would offset the environmental impact of proof-of-work entirely, solving a big problem with blockchains. (By the way, I think that there even bigger problems which aren't related to the topic at hand.)

Unfortunately, the computations need to be of a very special kind. As far as I can see, the following conditions need to apply
1) Solutions must be easily verifiable.
2) Solutions must not be pre-computable but linked to the previously computed solution.
3) The difficulty of the problems must be easily adjustable.
1)+2) are necessary to ensure the integrity of the blockchain, 3) is necessary to control the rate of transactions.

Obviously, the vast majority of interesting computations doesn't fulfill these conditions. So we don't live in an ideal world. But maybe there are computations of the required type which provide some value outside the blockchain?

Primecoin (https://www.coinbase.com/price/primecoin) thinks finding prime numbers is it and claims to have implemented a protocol which yields primes as a byproduct of the mining process. This plausibly fulfills condition 1) and there's some talk from the author about condition 3), but I don't see how condition 2) would be fulfilled. Also their white paper kind of reads like a high school project.

(I learned about it from this question on Stackexchange which @LucasB has linked to above. People there also make the point that having a byproduct with economic value might screw up the incentives.)

 

[russ_watters]

I think that if you're asking for a "business-model" you didn't understand what the OP asked. Let me rephrase it:

"How cool would it be if instead of wasting all this CPU power, the computational problem that is the origin of a bitcoin hash could be something useful, like calculations needed by research projects that will advance humanity, or something like that?"

If somebody is profiting, there has to be a business model. If the computational problem produces something more useful than just double-checking a spreadsheet, somebody has to choose the problem and it benefits somebody. Even if it's a claimed pure charity problem (SETI@home), there's still an entity that profits generates income from it (SETI).

You'd still make money, but instead of using the computational power to solve fictitious problems that don't do anything, it would be used to solve real-world computational problems to produce a coin.

No, not "you" (the person doing the mining), the person who defined the problem to solve and benefits from the solution. They make money. The miners would want a piece of that.

Employing computational power to brute-force a hash and actually succeeding in doing so has nothing to do with money. We arbitrarily assigned a monetary value to this process. The focus of the discussion has nothing to do with money, but on the computational problems that the Bitcoin network poses for the "mining" process (or, in other words, brute-forcing to find a hash), and turning this computation power that is already being done into something useful, without interfering with anything else of how Bitcoin works.

That's either naïve or a misunderstanding of how computers work. To be clear: computers use more electricity when they are doing a heavy computation than when they are idle. That costs money. So, mining bitcoin costs money. Changing the computation to "something useful" affects both the profit motive of the people already mining and may (depending on the business model) attract more miners.

What reason has the coin community to compensate a miner doing the same computation over and over again until that miner gets a number below an arbitrarily set limit, when the number found with the first computation was already the answer the coin community was looking for?

None. But they're not necessarily who is profiting from this exercise:

Why would they care less if, after finding the number needed, instead, that miner tried to find a new star, design a new molecule, or run google searches?

If miners could do useful work instead, they could charge both the coin community AND the people who gave them problems to solve.

As @LucasB said, it is not a question of "business model";

I might be willing to rent my computer to google for a fee, yes. The arrangement you allude to is called a "business model".

 

[LucasB]

1) Solutions must be easily verifiable.
2) Solutions must not be pre-computable but linked to the previously computed solution.
3) The difficulty of the problems must be easily adjustable.

Bravo! I think this is the root of the mathematics behind the Bitcoin manifesto. The real-life computation that fits into this criteria is narrow, indeed. Calculating Prime Numbers is a good one! Maybe PI sequence? Interesting stuff to search for!

---

Reply to Russ:
I see your point of "if the result had value, miners would want a piece of it, too". I think it's a valid human psychological observation, even though I hoped we could overcome this by having human-kind issues being thrown at the network, instead of Corporate issues. Anyway.

 

[DaveC426913]

Has no one yet brought up the SETI@Home Project of the nineties, or the protein-folding apps that followed?

These are real world problems that were being solved with the donation of idle time of millions of personal computers.

 

[kith]

No, not "you" (the person doing the mining), the person who defined the problem to solve and benefits from the solution. They make money. The miners would want a piece of that.

But there's no simple way for them to get it. Whether a cryptocurrency protocol is adopted or not is not decided by the miners but by how many people use the currency for their real world transactions and investments. The value of the currency is what determines the reward of the mining.

So as long as the main product of the system is the currency, you need to argue more about the potential users of the currency and less about the miners.

 

[Office_Shredder]

Bravo! I think this is the root of the mathematics behind the Bitcoin manifesto. The real-life computation that fits into this criteria is narrow, indeed. Calculating Prime Numbers is a good one! Maybe PI sequence? Interesting stuff to search for!

Are these actually good? How do you verify the next digit of pi efficiently? How do you verify a number is prime efficiently?

 

[LucasB]

Are these actually good? How do you verify the next digit of pi efficiently? How do you verify a number is prime efficiently?

I have no idea. The Pi one I made up. The prime number one exists and is open-source:

https://github.com/primecoin/primecoin

Primecoin is an experimental cryptocurrency that introduces the first scientific computing proof-of-work to cryptocurrency technology. Primecoin's proof-of-work is an innovative design based on searching for prime number chains, providing potential scientific value in addition to minting and security for the network. Similar to Bitcoin, Primecoin enables instant payments to anyone, anywhere in the world. It also uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Primecoin is also the name of the open source software which enables the use of this currency.

For more information, as well as an immediately useable, binary version of the Primecoin client sofware, see http://primecoin.org.

 

[Office_Shredder]

I have no idea. The Pi one I made up. The prime number one exists and is open-source:

https://github.com/primecoin/primecoin

That's pretty cool, but his isn't looking for more primes, it's looking for specific sequences of prime numbers. The site even observes there's a prize for a one million digit prime, so if I just submit a list of million digit numbers they're going to struggle to verify if my list is legitimate. I'm not smart enough to check the technical details but I assume there's something preventing me from doing that.

That said, good example.