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Comment by dandare | Hacker News Reader

> too volatile, too risky, too energy intensive

I am no expert but those three are features, not defects.

1/ Until there will be a central authority linking cryptocurrencies to the old financial system - impose taxes in CC - it will be volatile.

2/ Computer security is not something that can be definitely solved.

3/ Proof of work is the core concept of the blockchain. Maybe there will be some other CC technology in the future not based on blockchain that will not require proof of work, but that is outside of this discourse.

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If only we could replace "proof of work" by "proof of useful work".

The problem with useful proof of work, is that the emission rate becomes very hard to control. In most PoW consensus algorithms, a difficulty parameter is constantly updated to keep the average block-time around 10 minutes. To do useful PoW consensus, you'd need to find a useful problem, where the difficulty of solving the different problems is easily solved, while the solution to the next block, is still dependent on the solution from the last block.

In addition, you need a problem that is hard to solve but quick to verify. I reckon most useful problems would not be quick to verify.

My gut feeling says a set of open AI challenges, where the work is “train to solve this with accuracy > $difficultyParameter”, and the proof is something that both tests the accuracy of the work, and (if this idea is even possible) demonstrates that it wasn’t over-fitting/memorising.

NP complete problems are hard to solve but can be verified in polynomial time.

There are many useful problems in this class.

(Of course here hard to solve would mean in the "worst case", which may not hold for every problem instance).

> In most PoW consensus algorithms, a difficulty parameter is constantly updated to keep the average block-time around 10 minutes.

It's only 10 minutes in Bitcoin, rather than in most PoW algorithms.

Absolutely! And even ‘proof of stake’ alternatives tend to degrade into ‘proof of work’ (citation required: unfortunately I’m on mobile and don’t have the link to the relevant papers to hand!)

Note: Even basic forms of proof of ‘useful’ work, like using the heat from the miners’ CPUs, just act like a subsidy and push the cost of competitive mining further away, rather than making the blockchain more efficient...

Managing a distributed ledger is useful work.

Proof of stake degrades to proof of work if you don't have a solution to stake grinding and "nothing at stake," but recent proof of stake designs do. See for example the discussion here: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ

One candidate for useful work is TOR-supernode work. If the internet were to become distributed and fully encrypted you'd need a lot of bogus traffic and rerouting so the real traffic becomes invisible. There are many obvious problems with this, but in theory the more computational resources you put into a TOR-like network the more resilient and the more anonymous it becomes.

The morning paper had a post about it the other day[1], but I'm not sure if the solution is acceptable to the usual cryptocurrency crowd because it depends on running the useful code on a secure enclave (like Intel's SGX) to ensure single-threading and correct count of useful instructions that were executed. The miners are then rewarded according to number of useful instructions they executed. (The correctness of the instruction count and the work done can be validated cryptographically with SGX). I thought it was an interesting concept nonetheless.

[1]https://blog.acolyer.org/2017/09/06/rem-resource-efficient-m...

This would give Intel complete control over the global currency creation system. Anyone at Intel could choose to create an SGX-registered privkey off-chip and do as much fraudulent “mining” as they wanted, for free.

Securing a public ledger is useful.

The only kinds of problems that are suitable for PoW are those with predictable computational cost. The only thing that even approaches this and is also extrinsically useful is maybe math problems like finding prime numbers, but we don’t actually know what complexity class that falls under.

On 2: No it cannot, but traditional banks are attacked all the time. That didn't stop us from online banking. The role a bank could play is in secure and easy cryptocurrency.

It's similar to keeping stacks of cash at home. It's possible, but maybe mor secure if 3rd party does it. At this point none of the 3rd party exchanges are really reliable.

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