“I am gonna go make a cryptocurrency company,” BitTorrent inventor Bram Cohen told Steal This Show podcast host Jamie King. “That is my plan.”
Mr. Cohen plans to release a cryptocurrency to address Bitcoin’s mining inefficiency when it comes to wasting energy.
“There is a loophole,” Mr. Cohen notes. “You can get them to work with proofs-of-work, but then this involves these warehouses burning electricity. But there is a loophole in that, which is proof-of-storage.” Mr. Cohen believes this problem can be solved by using the extra storage space on computers.
“…Instead of computers burning electricity to mine, you have storage space that is implicitly mining because it’s sitting there, and proves it’s sitting there.” The storage space is already “sitting online not doing anything” on desktop computers and cloud offerings with extra storage capacity, according to Mr. Cohen on the podcast.
He adds: “There is lots of storage capacity out there, and its value is much greater than bitcoin mining rewards handed out.”
Mr. Cohen’s vision for his cryptocurrency involves fusing proof-of-space and proof-of-time. Proof-of-space work when users have an interest in allocating non-trivial amounts of memory or disk space to solve a challenge presented by service providers. Proof-of-space are similar to proof-of-work. They do not, however, use CPU-bound functions.
“There are some technical issues, which adding in proofs-of-time fixes,” Mr. Cohen tells Crypto Insider over text chat, admitting the concept is difficult to explain. “The short of it is that proofs-of-time keep an attacker from making a whole new fake history instantly, a problem caused by the property that mining requires no power.”
Mr. Cohen adds: “’Proof-of-time’ refers to a sequential proof-of-work, like the old saying that one woman can make a baby in nine months, but nine women can’t make a baby in one month.”
The main idea is zero waste in mining. “One of the benefits of storage based things is there is a lot less centralization in mining, so there is less concern about a 51% attack.”
The good part of this is subtle, Mr. Cohen tells Steal This Show listeners. “There are economic resources that you can apply towards rewards,” he elucidates. “People will spend resources getting rewards. So it will still be wasteful, but there is a waste that has already happened and you’re leveraging that at no additional cost.”
The BitTorrent founder’s specialty might work well applied to the world of cryptocurrency. Mr. Cohen launched BitTorrent to solve problems with bandwidth scarcity in sharing data over the internet, and his platform still today enables individuals to distribute large files sans the need for specialized infrastructure.
Before starting on his own cryptocurrency, Mr. Cohen must first tie up loose ends with BitTorrent, Inc., the business wing of his distributed software. “In the next few months, I’m going to devote myself full-time to the cryptocurrency stuff,” Mr. Cohen notes on the podcast.
Burstcoin, an altcoin listed on Coin Market Cap, uses what the developers term proof-of-capacity as its consensus method. It appears to merely be a re-brand of proof-of-space, the latter of which is the term preferred by academic literature.
As Mr. Cohen tells Crypto Insider, critics of Burstcoin lament the developers do not acknowledge Hellman time-space trade-offs in their coding. The coin, they say, attempts to solve problems by relying on a platform called NXT, instead of developing their own innovations.
It’s not the first time Mr. Cohen mentioned this plan. The BitTorrent founder presented a talk at the Stanford Blockchain Conference, in which he examined the potential of proof-of-space and proof-of-time in a cryptocurrency.
One slide in his presentation reads: “There are massive amounts of unused online storage in the world. [A cyptocurrency] requires no additional power to mine. No potential for ASICs. The available miners are highly decentralized.”
Picture from Cory Doctorow/Flickr.