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I like the idea of Bitcoin, but it bothers me that the computational power gets spent on such a useless project (hash function calculation). Isn't there anyway

I like the idea of Bitcoin, but it bothers me that the computational power gets spent on such a useless project (hash function calculation). Isn't there anyway that the system of Bitcoin could remain the same while the computational power goes into something like... I don't know... protein folding or weather prediction?

gwern 14y ago
No one seems to have proposed such a system, either for Bitcoin or for earlier proof-of-work systems (designed for fighting spam, that sort of thing). How do you come up with a decentralized secure system with verifiable problems which can come from anyone which they couldn't've computed the answer to in advance or have chosen it to be especially weak but which answer will still be actually useful? I keep some notes on the topic http://www.gwern.net/Notes#a-bitcoinbittorrent-driven-economy-for-creators-artcoin http://www.gwern.net/Notes#a-bitcoinbittorrent-driven-econom... but so far I haven't seen any proposals which might work.
sltkr 14y ago
It's not useless; BitCoin security depends on the majority of hashing power being in the hands of benevolent users. People who invest in ASICs and other mining hardware have an implicit incentive to be benevolent (because a collapse of the system means they won't see a return on their investment). So developments like this strengthen the security of BitCoin.
- tptacek 14y ago
  You're missing his point. It's not that people who buy ASIC rigs are evil; it's that the whole system is burning energy on a toy problem, instead of addressing a real scientific problem that needs compute.
  - sltkr 14y ago
    I think you're missing /my/ point, which is that BitCoin is useful as a currency, and these ASICs are strengthening the system, so by extension they are useful too. If you think the BitCoin project is entirely useless, even as a proof-of-concept, then yes, these ASICs are useless, but that's an entirely different discussion. > ... toy problem, instead of addressing a real scientific problem that needs compute. What, like generating Mersenne primes? A lot of these other so-called “real” “scientific” problems have virtually no scientific relevance. I think research into crypto-currencies is just as “real” as finding more optimal Golomb rulers or searching for alien lifesigns in radio noise.
    - tptacek 14y ago
      Circular argument is circular.
dustcoin 14y ago
Bitcoin's proof-of-work system requires a problem that is difficult to solve, has a predictable and adjustable difficulty, and allows solutions to be verified easily. Many hash functions, in Bitcoin's case, SHA-256, meet these requirements. Protein folding and weather prediction do not.
dasil003 14y ago
If Bitcoin holds up over time and fulfills it's full promise of a democratized currency immune to the influence of corrupt governmental power (which is a big if) then I'd argue that spending a lot of dedicated processing power is a small price to pay.
npongratz 14y ago
Some might argue that decoupling currency from central banks and government is not a useless project (or a toy problem). With Bitcoin, participants invest their own resources. It's none of my business how private individuals or enterprises peacefully allocate their resources, so I choose to not be bothered by how they do so.
DennisP 14y ago
The hash function is not arbitrary. Its purpose is to put the global list of transactions in an unambiguous sequence that everyone agrees on, to solve the double-spending problem. The inputs to the hash function are transactions. When a block of transactions is successfully hashed, the miner is awarded new bitcoins, as an incentive to do that necessary work of putting those transactions in order. I was worried about energy consumption, until I worked out how much the numbers. Starting with an extreme assumption that the bitcoin money supply reaches parity with the dollar by 2021 or so, total power consumption used directly for mining is only a couple gigawatts, about a tenth of a percent of the world's total. I worked that out like this: First assume the cost of mining equals the value returned. If mining is very profitable, more people will mine and difficulty goes up. If mining loses money, people drop out and difficulty goes down. Overall mining will always tend to be in the neighborhood of breakeven, with just barely enough profit to keep people from dropping out (though that's the equilibrium, and in periods of rapid growth we could be far from equilibrium at times). Pick a date, figure out how many reward halvings we'll have between now and then, and you get how many coins we award every ten minutes. Multiply by coin price to get value awarded each time. If you assume electricity is half the mining cost, divide that value in half. Then divide by the cost per kWh to get kWh per ten minutes. Multiple by six to get kWh per hour, which is the same as just kilowatts. And now you know how much power production you need to support the bitcoin economy given your assumptions.
- Dylan16807 14y ago
  The hash function is completely arbitrary. An infinitesimal amount of the work that goes into a block is actually processing the transactions. After that it's all proof of work, and you can slot in any proof of work. The problem is that 'useful' calculations aren't suited for extremely fast verification.
  - DennisP 14y ago
    I guess that depends how you define it. The only thing it's doing is taking transactions as input, along with a random number, and hashing them. It's just that the result is required to have a certain number of zeros to be considered valid, so you have to do it over and over again with different random numbers. If you didn't require a difficult computation, anyone could compute a different order of transactions and it would look just as valid. Easier hashing would not accomplish the goal of making a universally-agreed-upon transaction order.
kirian 14y ago
See this StackExchange answer for an answer to this question: http://bitcoin.stackexchange.com/questions/5617/why-are-bitcoin-calculation-useless/5618#5618 http://bitcoin.stackexchange.com/questions/5617/why-are-bitc... Some issues with "useful" computational work is that it needs to be computationally easy to verify the result (a hash function is but other work may not be), also it may not be crptographically strong so someone could come up with some method to solve the problems much more efficiently than others and make the network insecure.
m0nastic 14y ago
In general, specialized hardware tends to be expensive (niche uses result in poor economies of scale), which makes it difficult to see more widespread adoption, and consequently makes them less usable by researchers. If these types of hardware end up finding use in a new problem space (like bitcoin mining), then in theory that could make them more popular, and thereby cheaper (as well as increasing the acceleration of the technology, leading to better, faster, hardware for everyone who uses them). So in theory, even if Bitcoin mining doesn't have any "direct good" that comes from it, it could still be indirectly helpful to the larger scientific computing community.

gwern 14y ago

No one seems to have proposed such a system, either for Bitcoin or for earlier proof-of-work systems (designed for fighting spam, that sort of thing). How do you come up with a decentralized secure system with verifiable problems which can come from anyone which they couldn't've computed the answer to in advance or have chosen it to be especially weak but which answer will still be actually useful? I keep some notes on the topic http://www.gwern.net/Notes#a-bitcoinbittorrent-driven-economy-for-creators-artcoin http://www.gwern.net/Notes#a-bitcoinbittorrent-driven-econom... but so far I haven't seen any proposals which might work.

sltkr 14y ago

It's not useless; BitCoin security depends on the majority of hashing power being in the hands of benevolent users. People who invest in ASICs and other mining hardware have an implicit incentive to be benevolent (because a collapse of the system means they won't see a return on their investment). So developments like this strengthen the security of BitCoin.

tptacek 14y ago
You're missing his point. It's not that people who buy ASIC rigs are evil; it's that the whole system is burning energy on a toy problem, instead of addressing a real scientific problem that needs compute.
- sltkr 14y ago
  I think you're missing /my/ point, which is that BitCoin is useful as a currency, and these ASICs are strengthening the system, so by extension they are useful too. If you think the BitCoin project is entirely useless, even as a proof-of-concept, then yes, these ASICs are useless, but that's an entirely different discussion. > ... toy problem, instead of addressing a real scientific problem that needs compute. What, like generating Mersenne primes? A lot of these other so-called “real” “scientific” problems have virtually no scientific relevance. I think research into crypto-currencies is just as “real” as finding more optimal Golomb rulers or searching for alien lifesigns in radio noise.
  - tptacek 14y ago
    Circular argument is circular.

dustcoin 14y ago

Bitcoin's proof-of-work system requires a problem that is difficult to solve, has a predictable and adjustable difficulty, and allows solutions to be verified easily. Many hash functions, in Bitcoin's case, SHA-256, meet these requirements. Protein folding and weather prediction do not.

dasil003 14y ago

If Bitcoin holds up over time and fulfills it's full promise of a democratized currency immune to the influence of corrupt governmental power (which is a big if) then I'd argue that spending a lot of dedicated processing power is a small price to pay.

npongratz 14y ago

Some might argue that decoupling currency from central banks and government is not a useless project (or a toy problem). With Bitcoin, participants invest their own resources. It's none of my business how private individuals or enterprises peacefully allocate their resources, so I choose to not be bothered by how they do so.

DennisP 14y ago

The hash function is not arbitrary. Its purpose is to put the global list of transactions in an unambiguous sequence that everyone agrees on, to solve the double-spending problem. The inputs to the hash function are transactions. When a block of transactions is successfully hashed, the miner is awarded new bitcoins, as an incentive to do that necessary work of putting those transactions in order. I was worried about energy consumption, until I worked out how much the numbers. Starting with an extreme assumption that the bitcoin money supply reaches parity with the dollar by 2021 or so, total power consumption used directly for mining is only a couple gigawatts, about a tenth of a percent of the world's total. I worked that out like this: First assume the cost of mining equals the value returned. If mining is very profitable, more people will mine and difficulty goes up. If mining loses money, people drop out and difficulty goes down. Overall mining will always tend to be in the neighborhood of breakeven, with just barely enough profit to keep people from dropping out (though that's the equilibrium, and in periods of rapid growth we could be far from equilibrium at times). Pick a date, figure out how many reward halvings we'll have between now and then, and you get how many coins we award every ten minutes. Multiply by coin price to get value awarded each time. If you assume electricity is half the mining cost, divide that value in half. Then divide by the cost per kWh to get kWh per ten minutes. Multiple by six to get kWh per hour, which is the same as just kilowatts. And now you know how much power production you need to support the bitcoin economy given your assumptions.

Dylan16807 14y ago
The hash function is completely arbitrary. An infinitesimal amount of the work that goes into a block is actually processing the transactions. After that it's all proof of work, and you can slot in any proof of work. The problem is that 'useful' calculations aren't suited for extremely fast verification.
- DennisP 14y ago
  I guess that depends how you define it. The only thing it's doing is taking transactions as input, along with a random number, and hashing them. It's just that the result is required to have a certain number of zeros to be considered valid, so you have to do it over and over again with different random numbers. If you didn't require a difficult computation, anyone could compute a different order of transactions and it would look just as valid. Easier hashing would not accomplish the goal of making a universally-agreed-upon transaction order.

kirian 14y ago

See this StackExchange answer for an answer to this question: http://bitcoin.stackexchange.com/questions/5617/why-are-bitcoin-calculation-useless/5618#5618 http://bitcoin.stackexchange.com/questions/5617/why-are-bitc... Some issues with "useful" computational work is that it needs to be computationally easy to verify the result (a hash function is but other work may not be), also it may not be crptographically strong so someone could come up with some method to solve the problems much more efficiently than others and make the network insecure.

m0nastic 14y ago

In general, specialized hardware tends to be expensive (niche uses result in poor economies of scale), which makes it difficult to see more widespread adoption, and consequently makes them less usable by researchers. If these types of hardware end up finding use in a new problem space (like bitcoin mining), then in theory that could make them more popular, and thereby cheaper (as well as increasing the acceleration of the technology, leading to better, faster, hardware for everyone who uses them). So in theory, even if Bitcoin mining doesn't have any "direct good" that comes from it, it could still be indirectly helpful to the larger scientific computing community.