A decentralized digital currency where the proof-of-work has a second utility having a great commercial value (such as folding proteins) would be quite frankly revolutionary and would have a good chance at displacing Bitcoin.
But FoldingCoin is not that currency, because there is a huge downside in their design: they had to completely give up decentralization, which is the primary innovation and differentiator that block chain-based currencies like Bitcoin bring. Instead, FoldingCoin relies on the Stanford University Folding@home network, on the stats reported by this network, to distribute units of the currency proportionately to the amount of work. This means the Folding@home network could alter the distribution of coins at will, if it is attacked by hackers (likely), or if it operates maliciously (less likely). This means FoldingCoin would be unable to continue operating the day a single entity (the university) decides to stop running the Folding@home network. And so on. All the inconvenients and risks of centralization exist with FoldingCoin.
Trust me, I really wish it would be possible to design a decentralized digital currency built on a protein-folding proof-of-work, but so far nobody has found a way to do this in a decentralized way.
Edit: they openly acknowledge the fact FoldingCoin is not decentralized, see http://foldingcoin.net/fldc-vs-alts/ : "With Counterparty there is no current way of doing decentralized asset creation and issuance"
Edit #2: in theory a decentralized currency based on a protein-folding proof-of-work can exist and would work this way: compute a hash of a block of pending transactions and of the previous block hash (like Bitcoin). Use the resulting hash as a seed to deterministically generate a set of protein-folding problems. Miners try to solve them. Once a sufficient amount of these problems is solved (depending on a "difficulty factor"), broadcast the solutions and the transactions on the network, hence creating a new hash for the next set of protein folding problems. I don't know very much about protein folding, but as I understand the open problems are: (1) how to deterministically generate a set of useful protein-folding problems according to rules that should stay immutable for decades (you can't ask the participants to have to frequently update their mining software because consensus on these rules is hard to change), and (2) how to reduce the size of the solutions data published to the network every block without overflowing it (it is my understanding that protein folding would generate way more than a few hundred kilobytes every 10min which is the current average Bitcoin block size).
Hello, this is Robert with FoldingCoin :) I love that this discussion is here and I am replying to these comments right now.
There is no way of decentralizing with the Counterparty platform. I encourage everyone to read all of the great features that you get by being on Counterparty in the same link provided by @mrb. We feel also including the downsides is crucial to have a better understanding of what we are trying to accomplish.
Though we have measures in place to deal with the centralization issue we currently have:
1. We are incorporated as a Non profit in Indiana and we report to the government. We are 100% transparent about everything that we do. If we are to have malicious intentions, then we would be held accountable against the government.
2. We are setting up a board of directors to control the undistributed FLDC that we currently hold. This probably will not become a reality until the end of the year, but we are working on it. The first step was to become an official non profit found here https://secure.in.gov/sos/online_corps/name_search_results.a...
Please read here http://foldingcoin.net/alttokens/ for a complete detail on the benefits of adding crypto currency to FAH. Also you can watch this 26 minute video (i still have to edit, but the information is there https://www.youtube.com/watch?v=adROavBst7E and it goes into grave detail on the benefits
I have read this, and I'm still not sure I understand exactly what you're trying to do.
You create a crypto-currency, distribute it to people who do something valuable (protein folding), and then hope other people will start valuing this crypto-currency, so that the folders can sell their coins into the market and make a profit. Is this correct?
We do not want this to be your everyday "buy and sell coin", as you can see on https://www.poloniex.com/exchange#btc_fldc when we arrived there, we had high value, but like all other altcoins, our value dropped.
This is the nature of the altcoins.
However, we are working on 2 projects that will give this token value:
1. Creating this as a Meetup currency
2. Creating a ebay type martketplace for this coin (and any counterparty token) to be used to buy and sell goods
We are releasing our white paper by Feb 5th and it will go into great detail on how we will accomplish this, but basically since we do not have to create our own QR scans, transaction system, blockchain, ext... we can simply input the open source Counterparty features to create a decentralized Meetup currency and marketplace.
I know that is not a lot of information, but please give me until the 5th to post the white paper here. At this point, i do not expect the non crypto communities to fully understand what we are trying to do, but this is a very appealing coin to those that mine for whatever personal reasons they have to mine.
Is it even possible to have a decentralized currency where the mining problem isn't directly related to the maintenance of the ledger? Won't people just be incentivized to mine rather than preventing double spends, and the like?
The counterparty protocol is built inside of the Bitcoin network. All assets (including FLDC) are built on this platform. It houses the assets inside of the Bitcoin network by using the 140 bytes of unused data in every BTC transaction. So everytime you send or receive FLDC, you will notice it shows up in the blockchain as a 0.00006 BTC transaction. This actually represents the Counterparty asset. http://blockscan.com/ is a site that decrypts this information and displays it as the assets, blockchain.info will only see it as a BTC transaction.
So this prevents the double spend, because Counterparty is secured by the BTC miners, so the hashing power of the BTC miners is the same as the Counterparty assets. Only an attack on the Bitcoin network would affect FLDC
The proof of work needs to be tied to the block. It also needs to be very quick to verify but hard to compute (like getting a hash under a certain value). With scientific problems, you may need to solve a problem, then ever node on the network solves the same problem to verify what you did - which would waste a hell of a lot of resources!
We actually just had a double spend try and happen to us. I cannot show you the links, because the blockchain already ignored them.
What happened was:
We run a fundraiser for helping in the expansion of foldingcoin http://foldingcoin.net/fundraising/ and we use a company called Vennd.io to help in this fundraiser.
What happens is someone will send BTC to a certain address, and in return they are given an amount of 1 FLDC per every 0.00001 BTC they donated. Someone recently tried to double spend a BTC transaction to trick Counterparty into giving them double the FLDC in return for their BTC. However since the double BTC was denied, so was the double FLDC.
> A decentralized digital currency where the proof-of-work has a second utility having a great commercial value (such as folding proteins) would be quite frankly revolutionary and would have a good chance at displacing Bitcoin.
Why?
Let's say someone were to solve the protein folding 20 years from now. It would no longer be a challenge. This would mean the crypto-currency that used the once-hard problem of protein folding would no longer work, as the mining problem would no longer be difficult.
I think a crypto-currency is much better off doing something useless, as the worst thing that can happen to a crypto-currency is mining no longer being difficult. We want mining to solve the most difficult problem there is: breaking hash functions. Not solving something that has a greater chance of being solved, because it would mean the end of the crypto-currency.
We need something that we think and hope will stay difficult for as long as possible. Hopefully, protein folding will not stay difficult, because there are immense advantages to it being easy.
Protein folding can't be "solved". For a small protein of 100 amino acids, there are 2^432 (20^100) possible combinations (http://xray.bmc.uu.se/~lars/biowww/Proteinfolds.html). Bitcoin's SHA256 has only 2^256 possible values. So in a practical sense protein folding is a harder problem that Bitcoin mining.
Under the assumption that protein folding does get solved, we will simply transfer to the next humanitarian distributed computing platform out there.
We would not even have to decide what this is, we could leave it up to the holders of FLDC. We have a voting system (something that a traditional Altcoin cannot do) that allows us to distribute vote tokens to FLDC holders. http://foldingcoin.net/fldc-voting/
I hope protein folds fun out, then we would understand damn near everything about the human body, then i guess my next vote would be to help SETI and discover the aliens :D
There is already such a currency, it is called gridcoin.
The network consensus is reached by Proof of Stake instead of Proof of work, so no computational cycles are "wasted" on proof of work. But how much stake you get with is also determined by the amount of research you contribute to the BOINC group gridcoin relative to the total research done in this group. See further details there:
So there is two ways to mine gridcoin: with the normal proof of stake, which means you get an interest rate whenever you use your votes to secure the network and an additional "proof of research" bonus that you get with the stakes and that depends on your relative contribution to the gridcoin-BOINC team: http://boincstats.com/en/stats/-1/team/detail/118094994/over...
There are certain projects whitelisted, folding@home is one of them but there are many more.
What makes this even more interesting is the idea of commercial BOINC projects. As soon as you have a system where the inflation/money printing process depends on the computation power given to BOINC, BOINC projects to forecast stocks, AI, general machine learning tasks.. could also be created. Then this would be the first currency that has internal value, because the money in the inflation process does not come out of thin air but is based on computing power that is either used for science or for computing projects that deliever value.
Gridcoin's proof-of-research is not decentralized: it relies on the BOINC project servers. So it shares all the same centralization flaws as FoldingCoin which relies on the Folding@Home servers.
Gridcoin is a little different because if you remove the BOINC project servers, it is not centralized anymore, and only relies on proof-of-stake. But this would make it no different that the many proof-of-stake altcoins that already exist.
yes that is correct, the currency itself is decentraliced but the amount how much you mine additionally ("Proof of Research") depends on the BOINC project servers.
In addition to all the Boinc work Gridcoin does, there is a real opportunity for commercial/custom Boinc projects like 3D rendering, stock options analysis and almost any kind of simulation you can think of. The potential here is endless. It is true that Boinc kinda makes Gridcoin a little bit centralized, but the benefits that are yielded are worth it I think.
This "little bit" of centralization makes Gridcoin sufficiently brittle that it completely annihilates its chance of being widely successful AND stable.
Here is a thought experiment for you to understand: imagine if Gridcoin was as big and as valuable as Bitcoin, which has about $1 million dollars worth of bitcoins mined every day. A good chunk of this million dollars would be distributed based on BOINC rankings. So many people would be interested in gaining control of the BOINC servers. They could either hack them. Or they could offer to outright purchase the domain names and entity managing them, maybe they would even hire the staff running the servers. They would give appearances of operating legitimately at first. But eventually they would interfere with the rankings for their own financial benefits, either plainly maliciously, or with excuses to appear semi-legitimate (they could say "since we run the BOINC servers, we deserve a share of the profits"). The Gridcoin community would be upset and disagree with this. Maybe they would try to abandon trusting these BOINC servers, but how? They would not all agree on a solution. This would create forks in the chain. Maybe they would try to set up a new entity to run a new set of BOINC servers. At this point the situation is a mess and is no different than Ripple/Stellar to whom this exact scenario happened: part of the Ripple community abandoned Ripple and followed Jed McCaleb's Stellar fork.
Morale of the story: absolute power corrupts absolutely. You cannot give power to a central entity (BOINC servers) to control distribution of money. This is too much trust and is bound to break at some point.
And in addition to these social problems caused by centralization, what about the technical ones? What happens when the BOINC servers are down, ie. under DoS attack? How do you resolve gridcoin transaction conflicts which could be resolved by looking up the BOINC ratings? The whole gridcoin network would be unable to operate due to a few servers being down. On the other hand, a true distributed currency like Bitcoin does not depend at all on a single server. This is why being 100% fully distributed is incredibly superior to being 90% distributed like Gridcoin. Even if it was made 99% distributed, the 1% of centralization is what will eventually hamper it.
1) if the BOINC project servers were down then gridcoin would continue to function as a normal PoS coin and when they are online again you get the PoR bonus again
2) I think the BOINC foundation is very trustworthy and the advantages of contrubuting to science outweigh the disadvantages. Also BOINC itself is totally independent from gridcoin and well financed on its own for the public good of citizens contributing their computing power to science, so if they would tinker with the stats they lose their credibility and this would have consequences for them, eg. loss of fundingg or another team being funded to run the project servers, the software is open source anyway.
1) When the BOINC servers come under DoS attack while gridcoin nodes are downloading the rankings, some nodes will have the rankings data, some will fail to get it. This would fork the gridcoin chain because some nodes will take into account the PoR bonuses (and all transactions using these coins), while others will reject them because they were unable to confirm the BOINC rankings. This fork would in effect break the gridcoin network until the BOINC servers come back online.
2) You can be as honest as possible, but many people still won't trust you. This is precisely why, eg., Stellar is not trusted and not embraced more widely, despite being set up as a non-profit foundation, with a charter, a voting system, being completely transparent, etc. People and companies around the world (especially those with a tendency to have anti-USA views) may not trust BOINC (hence gridcoin) because BOINC is operated in and funded by the USA. Do you think most, say, Chinese companies would be willing to fully embrace gridcoin, knowing it relies heavily on a US-based project like BOINC? No!
I can see your viewpoint though. People who care about science and who may already be BOINC users would probably like gridcoin. But most people in the world (unfortunately) don't care that much about BOINC, and when given the choice of Bitcoin or Gridcoin, they would probably go with the former (if only because of their anti-USA views, or because Bitcoin is already more widely accepted).
We love gridcoin as they are a different platform. Being able to payout the same crypto for BOINC and FAH would be hard because the credits values are different.
You simply could not say half the Gridcoins go to BOINC and half go to FAH because what if there are more users on FAH in compared to BOINC?
Also POS has its issues like POW does: if someone controls half of the currency, then they could attack the network. At this point.. it would be very easy for somone with a couple thousands of dollars to buy half of the Gridcoin out there and perform the attack, its very expensive to buy half of the BTC mining hashrate.
BOINC has not released this system yet, it is still in the works and i look forward to seeing how it would work. Even though FLDC is centralized to an extent, every possibly solution dealing with BOINC and FAH has centralization leaks, just different degrees.
Also with BOINC, anyone can create a project to work on. Someone could potentially create a cron job application masked as lets say a protein folding aplication to harness BOINC power for not only A. Gridcoins but B. computational power used for something malicous like cracking email passwords. This bad actor would then gain two benefits.
Though after awhile BOINC may discover this and remove them, the possability for even a days worth of work could be problematic. Dont get me wrong, I love BOINC, but for this system to work, they would need to have an approved list of specific projects one could work on to receive Gridcoin.
Fair enough, i did not know that, and i do love Gridcoin as they are supporting a different platform than us. I wish them the best of luck, though i do think they should move over to Counterparty rather than a new POS blockchain they have been creating.
> BOINC projects to forecast stocks (...) could also be created.
That particular project would, IMO, defeat the whole purpose of gridcoin. The whole idea is to have computation do something actually useful, and if we'd be directing it into stocks (especially gridcoin stocks), it would be no different than bitcoin - i.e. wasting increasing amount of electricity just to support the very process of wasting it.
It's not cryptocurrency stocks but real world stocks, so yes you might argue about the benefit of these but there's certainly already a lot of money being made in this area.
But yes as of now all supported projects are science projects.
What if they kept a decentralized part and sort of "plug in" the proof of work part? They could have a fallback proof of work method s.t. if the outsourced proof of work fails they can keep the network running and call a decentralized voting to replace the source.
Primecoin (http://primecoin.io/) has been out for a long time. It's a decentralised cryptocurrency which uses prime number chains as its proof-of-work. I don't think it revolutionised anything, but some mathematicians were a little excited when it was released.
But FoldingCoin is not that currency, because there is a huge downside in their design: they had to completely give up decentralization, which is the primary innovation and differentiator that block chain-based currencies like Bitcoin bring. Instead, FoldingCoin relies on the Stanford University Folding@home network, on the stats reported by this network, to distribute units of the currency proportionately to the amount of work. This means the Folding@home network could alter the distribution of coins at will, if it is attacked by hackers (likely), or if it operates maliciously (less likely). This means FoldingCoin would be unable to continue operating the day a single entity (the university) decides to stop running the Folding@home network. And so on. All the inconvenients and risks of centralization exist with FoldingCoin.
Trust me, I really wish it would be possible to design a decentralized digital currency built on a protein-folding proof-of-work, but so far nobody has found a way to do this in a decentralized way.
Edit: they openly acknowledge the fact FoldingCoin is not decentralized, see http://foldingcoin.net/fldc-vs-alts/ : "With Counterparty there is no current way of doing decentralized asset creation and issuance"
Edit #2: in theory a decentralized currency based on a protein-folding proof-of-work can exist and would work this way: compute a hash of a block of pending transactions and of the previous block hash (like Bitcoin). Use the resulting hash as a seed to deterministically generate a set of protein-folding problems. Miners try to solve them. Once a sufficient amount of these problems is solved (depending on a "difficulty factor"), broadcast the solutions and the transactions on the network, hence creating a new hash for the next set of protein folding problems. I don't know very much about protein folding, but as I understand the open problems are: (1) how to deterministically generate a set of useful protein-folding problems according to rules that should stay immutable for decades (you can't ask the participants to have to frequently update their mining software because consensus on these rules is hard to change), and (2) how to reduce the size of the solutions data published to the network every block without overflowing it (it is my understanding that protein folding would generate way more than a few hundred kilobytes every 10min which is the current average Bitcoin block size).