Well, seems like a lot going on here since I last checked. Wraith808 posted down in the Basement, which directed me over here. INTRINSIC VALUE
This is most often an unproductive discussion that boils down to, "well, that's not what *I*
mean by 'intrinsic value'." It's like debating with Humpty Dumpty. "There's glory for you!"
So, I'll be (mostly) clear about how I'm going to use (abuse?) that term... I mean that it has a use. Not very complicated. Not sophisticated. Not difficult. Not full of BS. It has a use. Period. Note that I have used a very broad definition. That is intentional.
Suffice it to say that (I believe) the most proper definition of "intrinsic value" requires this qualification: "to <who>?"
Remember, "value" is subjective, and requires someone to place value on some "thing" ("thing" can also be "event"). To talk about value outside of some kind of agency is to entirely miss the point. Agents place value on things/events. "What is it/that
worth to me/you
Nuff said there. ENERGY CONSUMPTION
This is a bit of a silly argument. "Bitcoins are causing the Earth to melt! OMG! Shut it down!" I'll refer people here
. All activity requires energy. All of it. There are no exceptions. If you want output, you have to have input first.
A splash of anarchism
I try to avoid this bitcoin stuff because the whole world of finance seems completely insane and make-believe to me.
And no less insane than the world of government.
In any event, the problem is already solved.
However, i am somewhat interested in the technology issues.
Ah! And how we shall explore some of your musings below~!
But what I think eleman touched on which is odd about bitcoin is that, if i'm understanding it correctly, one of the key ideas of bitcoin is that by design it MUST require huge amounts of otherwise-useless cpu cycles, in order to simulate/create scarcity.
You're not understanding it properly.
1) The CPU cycles are not worthless. I'll explain below.
2) They do not simulate/create scarcity. I'll probably skip this as it's going off into a non-tech area. (2 things to address there though.)
It's a key property you have to have scores of high-powered computers doing nothing but churning through useless operations 24 hours a day, 365 days a year to do "work" that is of no value other than to purposefully slow down the generation of these digital tokens.
No. This is a complete mischaracterisation of what is happening. It isn't remotely close.
The next bit will meander a little, so please stick with me.
The genius behind Satoshi Nakamoto's invention (or one aspect of his genius) is that he solved a general computing problem called the "Byzantine Generals' Problem". Previously all attempts at digital currency have failed because they could not solve the "double-spend" problem (a specific case of the Byzantine Generals' Problem). So, people could spend the same digital currency more than once in the same way that you copy a file. Satoshi solved this problem so that coins cannot be spent twice.
More on the 'general'
problem here: https://startpage.co...+Generals%27+Problem
In short, he solved it. The solution is the "blockchain", a public ledger of accounts.
Now, in order to ensure that people don't access other people's ledger entries (entries in the blockchain - where your bitcoins are stored), we use cryptography.
The cryptographic problems are very difficult to solve, but very easy to verify.
Grab a Sudoku and solve it. Now, verify that it is correct. THAT'S IT! It took you a long time to solve, but you verified it very very quickly.
Bitcoin and other crypto currencies do the same thing.
And thus, the Byzantine Generals' Problem is solved.
The energy is not wasted. It is securing the network and the blockchain. There is no minimum or maximum amount of computing power than "must" be thrown at the network/blockchain. It can be more or less. However, the more computing power thrown at the network/blockchain, the less chance that a malicious miner can fudge entries and double-spend.
The double-spend is now known as a "51% attack".
Another splash of anarchy!
"Democracy" is the original 51% attack!
A 51% attack is where you acquire 51% of the network hashing power and then use it maliciously against the network/blockchain.
Yet another splash of anarchy! (Remember the cypherpunk roots.)
This is exactly the same as how the majority in a democracy force their will on the minority.
With the power behind Bitcoin now, a 51% is virtually impossible. Search for videos with Andreas Antonopolous for more information on why that is so.
Hopefully I have outlined the cryptography reasons why the energy isn't wasted. tl;dr
- The energy used to secure Bitcoin is much the same as how you might spend resources to guard your home/business with locks, fences, CCTV, guards, dogs, etc.
But now the interesting technological question that comes to mind is, could you flip that?
I think I've already established that it's not wasted. I skipped quite a bit, but you can read the paper for the details on exactly how it happens. But... to answer the question again from a different perspective...
Could you make a new crypto/digital currency where the work required to virtually "mine" such things was actually PRODUCTIVE USEFUL work?
It has already been done. Primecoin. http://primecoin.org/http://www.ppcointalk.org/https://bitcointalk....x.php?topic=251850.0https://bitcointalk....x.php?topic=245953.0
First non-hashcash proof-of-work in cryptocurrency, pure prime number based proof-of-workhttp://primecoin.org.../primecoin-paper.pdf
A new type of proof-of-work based on searching for prime numbers is introduced in peer-to-peer cryptocurrency designs. Three types of prime chains known as Cunningham chain of first kind, Cunningham chain of second kind and bi-twin chain are qualified as proof-of-work. Prime chain is linked to block hash to preserve the security property of Nakamoto’s Bitcoin, while a continuous difficulty evaluation scheme is designed to allow prime chain to act as adjustable-difficulty proof-of-work in a Bitcoin like cryptocurrency.
Primecoin is the first cryptocurrency on the market with non-hashcash proof-of-work, generating additional potential scientific value from the mining work. This research is meant to pave the way for other proof-of-work types with diverse scientific computing values to emerge.
I highly recommend reading that paper if you are interested in some of the technical details. It's fascinating stuff. They've really done their homework well.
Like a crypto/digital coin which was generated by successfully solving protein folding problems, etc.
The example you've given probably isn't a good one. This is cryptography... not a division of the life sciences. If there is general class of mathematical problems that relates to life sciences, then perhaps. I don't know though. Those are questions for cryptographers to determine. (And specifically, those questions are NOT for biologists or physicists to answer.)
Now, could you tack on some kind of life science problem or problem in astronomy or cosmology? I suppose so, but it would not have any value for the network. It would be "busy" and meaningless work for the network. HOWEVER... Do note that Primecoin DOES the kind of work that you've hinted at and *IS* meaningful to the network. i.e. The work it does is both productive and meaningful.
Specifically, you need a class of problems for which you can continually generate solutions, and not a class of problems for which at some point you have generated all the possible solutions.
The classes of problems that Primecoin addresses are well beyond my grasp as I'm not a cryptographer and I don't have an advanced degree in mathematics.
Such a thing would still enforce rarity/scarcity by requiring massive cpu cycles -- but those cycles themselves would be producing useful work.
Scarcity has nothing to do with anything as far as the Bitcoin technology goes, unless you mean for a 51% attack. If you mean rarity/scarity in the economic sense, then that's an entirely different question and completely irrelevant to the Bitcoin technology.
i.e. The computing power does not create any kind of scarcity --- but there may be a scarcity of computing power.tl;dr
- Well, not really a summary, but hitting 2 main points made above in several posts... Primecoin and Peercoin solve different problems: the problem of scientific usefulness over and above the securing of the network/blockchain, and energy consumption, respectively.