

Bitcoins for Good - listrophy
http://www.namingthingsishard.com/2011/05/31/bitcoins-for-good.html

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abulafia
This would be a significantly better project than bitcoin, and it would be
possible, it just wouldn't serve the same purpose. What it would do is value
time and effort; what it wouldn't do is waste pointless cycles and energy to
make hidden currency. This currency would be valuable because someone put
energy toward social good. In contrast, bitcoins are valuable because there's
a limited quantity of them and their usage can be hidden. Hence, limitless
"bitcoins for good" could be created, in a vibrant and dynamic economy, while
highly deflationary bitcoins will simply sit in a miser's coffee can buried in
the backyard.

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Jabbles
Is bitcoin one of the most strenuous tests of the SHA-256 algorithm ever run?
Besides the obvious benefit to the bitcoin ecosystem, this systematic hashing
could provide useful data to a cryptographer. If there is ever a flaw in the
algorithm discovered, I bet that bitcoin will play some part in it.

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wccrawford
I'm sure this was considered when BitCoin was being created. It's easy to
-say-, but quite a lot harder to do.

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jonprins
The author is fundamentally flawed in his approach. He thinks bitcoin mining
is just mindless churning on your GPU.

But in reality, it's cryptographically checking the validity of bitcoin
transactions. So the system churns for the benefit of the system itself,
instead of churning for the benefit of some external goal.

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eli
No, I think everyone is on the same page. It's just semantics: mining _is_ a
mindless task, it just happens that bitcoin requires verifiable but otherwise
pointless tasks in order to operate.

And I don't think you should dismiss this criticism so easily. I personally
have very little confidence in bitcoin as a currency. But if the system also
contributed to science by folding proteins or finding Mersenne primes or doing
anything else that is externally useful, I would consider participating.

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jonprins
Am I completely missing a key part of bitcoin, then? My understanding was the
'pointless tasks' were actually the verifications of previous transactions.
And to make such a system verifiable, several nodes in the network must hash
out the same blocks the same way.

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eli
Yes, that's my understanding. But it doesn't require that the tasks are
"pointless" -- just that they are hard to compute, but relatively easy to
verify.

There are lots of problems in bioinformatics and physics that are hard to
compute and easily divided into chunks. Find one that also has easily
verifiable results and you've got a pretty good candidate.

~~~
jonprins
But the problems being chunked up in bitcoins are the actual bitcoin
transactions, thus churning them is not pointless. It strengthens the system.

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heyrhett
This is not practical. If bitcoins related to some sort of market value for
computation, there would be inflation of 40% / year.

Look at how mining for bitcoins compares to mining for real gold. Our species
spends all this energy to dig gold up out of the ground, purify it, just to
stick it back into the ground in vaults and then we pay someone to stand
watching over it.

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eli
Sorry, I don't follow. Where does 40% come from?

And to state the obvious, not all gold goes in vaults. Both the supply and
demand for gold is affected by its fashion and industrial uses.

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jdavid
Actually the largest price driver of gold now is 'fear'.

Since many countries price their currencies to the USD, the USD has become a
defacto currency. This means that inflationary pressure on the USD affects the
whole world.

Gold prices are up as people are speculating that some countries will price
their currency against gold. If countries don't do this, or if people stop
believing that countries will do this, gold will go down in value.

Ironically large company stocks are probably the largest most stable and fluid
currencies left. I think the term is fungible.

So if you buy stock in say a microsoft or a google, the changes are that those
large company stocks will trade well if your home country's currency is
inflating. The reason is that large companies diversify their holdings and
optimize those holdings for profit. This is something that governments rarely
do well.

I have started to wonder if investing in a sort of International Dow Jones as
a currency base makes sense. I don't know how it would work, but it would be
better than using gift cards as part of a currency as suggested by a few.

As for bitcoin as a currency, it seems to be based off of the cost of energy/
computing efficiency, however the currency does not seem to have been designed
to match the USD, but rather make use of a set of tech features that were
convenient to demonstrate it's proof.

It seems clear to me that Bit Coin Miner's will find the largest profits in
using FPGA's, and that is unlikely to create a cloud structure that is useful
for other things. How can you virtualize an FPGA?

All currencies are imperfect.

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eof
Killing two birds with one stone is laudable; but a fair, decentralized
currency with a bird worth a stone by itself.

