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Some of us are taken with bitcoin. We have learned its basics, and are more or less versed with its socioeconomic implications. We get it.
But when an acquaintance of mine told me recently that he's trading in more than 30 bitcoin alternatives, or altcoins, my mind was blown. Acting as a sort of crypto-FOREX trader, he's the first to answer one of my go-to questions on bitcoin: What would you do to make it better?
He rattled off some of the altcoins, and eventually focused his argument around a week-old cryptocurrency. It's called Primecoin, and it aims to harness what he considers to be the spent energy of bitcoin's algorithm.
"A lot of bitcoin is creating garbage," he explained. "Every now and then—roughly every 10 minutes—it produces a valid block, which is very valuable; currently worth $2,000-plus. But otherwise, it's crap, and very wasteful. Well, digitally speaking."
He was referring to bitcoin's alpha-numeric SHA256 hashes, the computations that find bitcoins and burn up bitcoin-mining gear for no other sake than to produce more bitcoins and secure the network with proof-of-work. Primecoin is also based on a proof-of-work method, but it rewards its miners as they find elusive chains of prime numbers. As Sunny King, author of Primecoin's white paper and method, put it:
Primecoin is the first crypto-currency 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.
Incentivizing cryptocurrency by using mining methods to advance number theory may seem trivial. But it may lead to greater fortunes. Bitcoin Magazine pointed out that the Electronic Frontier Foundation "is offering $550,000 worth of prizes" to whichever groups are first to uncover a prime number more than 1 million, 10 million, 100 million, and 1 billion digits long. The first two—1 million and 10 million—have already been accounted for.
But don't rush off. Primecoin won't win you prizes; it's not looking for record-breaking prime numbers. In order for Primecoin to operate efficiently, King points out that "the work needs to be efficiently verifiable by all nodes of the network," which means the primes could not to be too record-breakingly long. This automateically precludes Mersenne primes, adds King, and "leads to the use of prime chain as primecoin’s work."
Could Primecoin's initiative to actually do something useful be a step toward more holistic virtual money systems? (It should be noted that King's earlier altcoin, PPCoin, looked to lower the inflation and rising transaction fees that inevitably stem from the dramatic amount of time and energy that mining for bitcoin demands.) The expended-energy argument provides a basis for faith in bitcoin's security. But any machine's GPU has to lay very long row of useless hashes before it finally breaks open a block. It could take years for my MacBook to mine a bitcoin.
As more people latch onto bitcoin hype, and buy rigs that will make them negligible returns on investment, the environmental implications of such projects become a fair concern. But if altcoins follow in the footsteps of Primecoin, would it be so wayward to imagine a coin that computes and predicts weather and climate? To echo the efforts of well-known and distributed-computing projects like Berkeley's Seti@home and Stanford's Folding@home, crypto-currencies with a secondary purpose are yet to spring up.
The reality is that, in practice, bitcoin's source code itself will probably never be altered to find aliens or snuff out diseases. But imagine the altcoin—perhaps Primecoin, whose initial pitch is inspired—that tries to cure cancer. That could be a bitcoin killer.
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