SolarCoin cryptocurrency pays you to go green | Hacker News Reader

SolarCoin cryptocurrency pays you to go green

newscientist.com

49 pointsrukshn64 comments

There's this other thing you can get in exchange for generating solar power that's fairly popular and can be used to purchase goods and services. I can't remember it's called, but I think it's fairly popular in places like the USA, Burma, and Tibet.

Oh and you can keep it in a physical wallet, it doesn't require an internet connection, transactions using it are almost untraceable, and it comes in a wide variety of sizes and colors.

Sadly, where I live, I'd have to move at least 40 miles away to fall under a power company that would pay me for my excess production. IIUC, they have some percentage they have to meet for various stuffs (tax credits?, funding?), once they met that, they stopped taking new customers for the program.

My sarcasm aside -- this whole idea is idiotic. Power has a market value. If the solarcoins aren't worth as least as much as the cash you can get, no-one will take them. If they're worth more, then whoever is giving the solarcoins out will be annihilated by arbitrage. And that completely leaves aside verification issues. It's a damn silly idea.

Yeah, this just seems like a marketing gimmick to ride the popularity of flavor-of-the-month-coins. Power is already valuable. You can sell it for USD, euros, bitcoins, etc.

Devil's advocate: In a technological civilization, it makes more sense to back a currency with energy than with any other commodity. (USD is already de-facto backed by oil [1].) In a sense, BitCoin itself is also energy-backed, as the mining yield these days is roughly equal to the cost of electricity.

That said, while a distributed currency that is miraculously 1:1 exchangeable with energy would be pretty neat, SolarCoin doesn't seem to be that. If anything, it would make more sense to just pay people in BitCoins for contributing energy back to the grid, or to mine BitCoins in a carbon-neutral fashion.

[1] http://en.wikipedia.org/wiki/Petrodollar

"mine BitCoins in a carbon-neutral fashion."

That is a very interesting notion. I'm not sure how you'd implement it, particularly with different amounts of carbon emitted from different means of generating power, &c.

I was thinking carbon-neutral for the individual miner, not for the whole network. The latter would be a very ambitious project.

Do you just mean individual miners individually going out and purchasing carbon credits? What would motivate that, when the thing they're producing is fungible (and thus it can't strengthen their brand, &c)?

I'd applaud it in any event, but it seems like something that can't really be enforced and is unlikely to be widespread without enforcement as I have no real means of converting my approval into anything tangible or even directing it where it belongs.

I'm thinking something far simpler: solar panels hooked to a battery, which is hooked to a minimalist mining rig that runs as often as it's able. Self-powered mining, other than the minimal amount used for passing network traffic, and whatever's used by the pool.

Ah, also interesting, though I'm skeptical about it recouping investment in reasonable time.

If it actually became common, it would mean mining would move East-West with the day, and North-South with the seasons.

"USD is already de-facto backed by oil [Petrodollar]"

Kind of, but not really, and not in a free market way. The $ is backed by the us military. You can't have competing currencies becoming Petro-X. If you try, you "get democracy" in your country.

Doesn't this break bitcoin's concept of no central issuer? If you have to send stuff to the organiser, that's somewhat of a central authority, isn't it?

I could see SolarCoin working if there was some kind of specialized hardware that monitored the amount of electricity flow, but I can't think of a way to verify that it is hooked up to a solar panel versus plugged into a wall.

I could see people hacking that specialized hardware...

yes.

sidenote: please stop making coins.

it sort of defies the point of it being a currency of any kind if there are millions of different yet indistinguishable ones.

Why? A new blockchain is no real threat to any existing and established altcoin such as BTC or LTC. On the other hand, it's possible that someone will come up with either a technical improvement over the established altcoins, or die trying.

Now, what would be really helpful is a wallet app that lets you have all different types of coins in one place. That way you wouldn't have to run 17 different clients for 17 different coins. It would also help you lose all your altcoins in one place.

It is a threat! If a there are a thousand indistinguishable block chains, it's (arguably[1]) as if the number of coins on a single blockchain were much bigger, which drives down the price. Since there's an infinite supply of new blockchains at more or less any price point (again, arguably), the price should be driven down to zero.

[1] Arguably, -there is, for instance, the question of whether arbitrary differentiators such as "being the first blockchain" suffice to make the blockchain market not perfectly competitive, - but this point needs to be (and as far as I can tell hasn't really been, here on HN) argued about. See http://marginalrevolution.com/marginalrevolution/2013/12/on-... for some references, though.

Not much more than different currencies or different goods devalue others as stores of value in general.

I think you're wrong, but am willing to be told otherwise. Here's why: one currency is not (generally) legal tender outside its country of origin, so there's an exchange rate determined roughly by the trade balance between countries etc. If all currencies were legal tender everywhere (a much more analogous) situation, the exchange rate would not be determined by the same factors, since the currency would in no way be pegged to the nation.

Then the question becomes: what does in fact determine the exchange rates? I.e., would one currency be "infinitely valuable" compared to all others? Which one? The first? Or would all of the stabilize at the point where 1 of A is always worth 1 of B, because that's easiest to work with?

The value of an altcoin, the true market value, is in my mind determined by two things. First, how many different ways can I spend it reliably? For example, I can spend BTC on goods on Overstock.com. I can spend Dogecoin on a tip for a comment on Reddit. BTC is already more valuable to me than Dogecoin.

Second, is the size and composition of the specific altcoin network. For example, lots of new altcoins use central checksumming during the early stages to prevent early market manipulation. This is bad, since the coin is then for a period of time controlled by a central entity. BTC and LTC are mature enough to not have this problem anymore.

In other words, sure bring on more altcoins/blockchains. I don't care. Let's let the market decide that. In the end the total market cap of all these coins will converge and the more coins are created every day the more we approach the point of people starting to be able to tell the difference.

That determines your subjective value for the coin. Market value depends on it only to the degree that the subjective value others place on the coin mirrors yours.

Of course. Naturally, everyone places different value on these things. However, I have several reasons to believe that my criteria has some merit. Specifically, look at the reverse of each of the two criteria: imagine a coin with a very small network and a very young blockchain. This means that a player with lots of computing power can at least mine a huge amount of the coin, or even carry out a "51% attack" and double-spend.

Also, imagine a coin which you cannot spend on anything. You can mine it and send and receive it in a vacuum, but you cannot derive any other value out of it. Is such a coin in any way more valuable than a coin which lets you buy a cup of coffee, a car, or a house?

I certainly think that those both deserve to be important considerations, and probably most others assessing will think so as well, so they will certainly affect things. But there will be lots of other factors, individual (diversification, speculation) and collectively (amount of currency available), so I feel that "determined by" is too strong. I also didn't really like the "true market value" wording, but I'd have let it slide if that was my only concern.

I'm not sure legal tender matters much. It's all about what people generally expect other people generally to give them for the currency when they decide they want to convert it into something else. See, for instance, the Somalian Shilling retaining its value despite a period that basically lacked a government (http://www.economist.com/node/21551492) or the fact that the dollar is happily accepted in very many countries. What does screw with things is currency controls, but that's not really substantively different than any other market manipulation.

17? At the last count there's over a thousand of them.

And most aren't used at all.

http://en.wikipedia.org/wiki/Ripple_(payment_protocol)

Don't worry, natural selection will happen to them. Most coins of close to zero value will reach the bottom faster than they expect.

This isn't obvious! See my comment to IgorPartola above.

I don't accept your fiat of making BitCoin the one true coin.

there's room for more than 1, litecoin, bitcoin.

don't just make copies of what's available, it drives down price and stops adoption of it as a trading standard.

But SolarCoint is not a bitcoin -- it is just a cryptocurrency.

I don't think it's fair to call it a cryptocurrency if it relies on something that can't be visible to the network without reliance on single trusted party.

It technically still is a crypto-currency, just not a decentralized one.

Would you call Chaum's eCash (http://en.wikipedia.org/wiki/Ecash) a crypto-currency?

Oh, like PayPal?

No, PayPal controls the complete funds of every individual. Even with a centralized crypto-currency, only those transactions are valid that have your cryptographic signature. The centralized trusted third party only decides on the order of transactions.

I've always thought "proof of work" in cryptocurrencies was a bit of a misnomer since the the "work" is useless.

Could resources be used for productive work instead, for example distributed computation? I'm thinking something similar to SETI@home, but with currency rewards for work done.

Perhaps this would also require a central issuer.

Making a monetary system function is important work. From the Federal Reserve chairman to the sysadmins running wire transfer servers to the crew running the printing presses to the security guards who transport cash, there's a huge amount of work involved in running current fiat money systems.

You can dislike cryptocurrencies for all sorts of other reasons, but that fact that some resources are consumed to keep it running really is going to be a feature of any sort of monetary system.

Could you give some estimates how much energy is spent on having current fiat currencies, and how much energy would be spent if similar amount of transactions were used for cryptocurrency. I always wonder why people don't discuss this, or when do, no estimates are given.

My worry, regarding resources, is not that any are burned, but that it's an arms race where effort to attack is O(effort to defend), which means we always need to collectively burning more resources than attackers could and we don't even get the tremendous discount afforded us by crypto in other spheres (brute forcing encryption takes effort of O(2^effort to defend), for example). If we get more efficient algorithms or processes or technology in traditional finance, the resources we spend can shrink - not so, with proof-of-work.

Of course, with physical attack there is always an arms race, but bitcoin is still vulnerable to physical attack.

I think you're making a rather tenuous argument here. Just because existing monetary systems involve work, and a new alternative system also involves work, doesn't imply that such systems always must.

There is gridcoin [1], but it is just using standard mining software for litecoin, then checking to see if you're running the BIONC program, and giving you extra credit. I believe that the minute it gets popular, people will fake running the BIONC software. We need something where the proof of work is intimately tied to the actual BIONC calculations.

[1] http://www.gridcoin.us/

The structure of existing cryptocurrencies does impose some restrictions on what kind of work can be used. Most notably, it needs to have reasonably predictable difficulty, and be easily verifiable.

As you suggest, one thing you could do to tackle the latter problem is to have a centralised entity to verify work. This could be implemented in existing systems by making the "work" signing data with the issuer's private key, and having the real work be negotiated out-of-band. This mechanism could be extended allow multiple independent issuers.

Unless I missed something[0], the work is actually useful in cryptocurrencies: it's actually bruteforcing a crypto function to find a solution for the block. Once the solution is found, the block, which contains actual transactions, is known to be valid, and the block is said to be mined. The very system that generates money is the system that validates the transactions. The miner gets the nominal fee of 25 BTC per block, plus any fees included in the transactions.

[0]: http://www.righto.com/2014/02/bitcoins-hard-way-using-raw-bi...

It's useful in the sense that it serves a purpose, but the results themselves are essentially meaningless.

What people are asking is whether it's possible to adapt some kind of meaningful computation to serve the same function.

There's http://curecoin.us/ which hasn't been released yet but plans to make protein folding the proof of work and so help with research into cures for various diseases. Remember though that the usual crypto currency proof-of-work serves a purpose to verify transactions.

Primecoin (http://en.wikipedia.org/wiki/Primecoin) searches for chains of primes as its POW

Cuckoo Cycle (https://github.com/tromp/cuckooh) searches for cycles in a random bipartite graph (induced by Cuckoo Hashing).

Instead of requiring a lot of computation, it requires a lot of waiting due to latency of random memory access.

The title sounds awesome, and then I read that it's being created by a centralized company that's organizing the entire thing.

I'll bet they're organizing a hefty personal profit into their ploy as well.

"I'll bet they're organizing a hefty personal profit into their ploy as well."

Yes, I'd say they are. From the FAQ (Bitcoin section)... Largest holder of reserve currency: SolarCoin Foundation

Sounds like they've premined it.

> Bitcoin has been accused of wasting energy in the past because of the computing power it takes to mine coins, but Gogerty says that SolarCoin is 50 times more energy-efficient because its algorithm allows the total number of coins to be mined faster...

That's not how crypocurrency mining works. Mining more coins in a shorter period of time does not make it more efficient. It just means the coins are worth less money.

"While most cryptocurrencies are just themed copies of Bitcoin – Dogecoin, based on a famous internet meme, is a notable example"

I could be mistaken, but I was under the impression that almost all of these themed currencies such as Dogecoin were based on Litecoin...

Correct. The writer doesn't really know what he is talking about or is oversimplifying. Litecoin clones are scrypt based. Bitcoin clones are sha-256 based.

Litecoin itself is a clone of the first scrypt based coin, Tenebrix.

Today I learned...

And who is going to take a SolarCoin in return for goods or services? And what would then do with such a coin if they took one?

Issuing currency is not the challenging part.

The same objection was once made to bitcoin.

Darn it, I had this idea last year and was going to call it GreenCoin.

Oh well, laziness wins again.

On encouraging decentralized home-based solar power in general, wasn't there an issue with the grid not being optimized for this sort of thing? Has that changed?

No necessarily. It depends if storage is done by using batteries installed at the person's home or by sending the current back into the power grid.

That would be great but can I only mine if the solar panels are working? That would not work out here in Michigan, atleast during this winter.

While a laudable initiative, this looks more like a way to get new cryptocurrency in the market by riding on solar community good will.

So the people who made this coin have the ability to mint an arbitrary amount? Seems legit.

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