Bitcoin + Science = Gridcoin

May be, just may be, if Satoshi Nakamoto took a step further, Bitcoin would be much more widespread today, and backed up by something much more substantial than the human beliefs - the human knowledge.

46000 PetaFLOPS (or 3600 Terahashs/s) of network power is wasted on the accumulation of blockchain "garbage" to solve problems that eventually add no real value to the world. Imagine, you could give a fraction of that power to a P2P network, that attempts to solve problems in the areas as diverse as mathematics, medicine, molecular biology, climatology, and astrophysics.

Sounds naive and far fetched? Then imagine you could get a handsome reward for your efforts.

What is Gridcoin?

Launched 2 weeks ago, Gridcoin (GRC) is a new cryptocurrency based on the Bitcoin protocol. It uses Scrypt as a proof-of-work algorithm  - the same algorithm that powers Litecoin. It is designed to be mined with consumer-grade hardware, and provides faster transaction confirmations (2.5 minutes on average).

Gridcoin is scheduled to produce approximately 168 million currency units, and is designed to give greater rewards to those who donate part of their processing power to the Berkeley Open Infrastructure Network Computing (BOINC) . Block completion is awarded with a mere of 5 GRC without the utilization of BOINC. However, the rewards go sharply up once BOINC is utilized, and range from 6 to 150 Gridcoins.

What is BOINC?

The Berkeley Open Infrastructure for Network Computing (BOINC) is is the "Wikipedia" of the computing power - an open source middleware system for volunteer and grid computing. Originally, it was developed to support the SETI@Home project. However, soon after it became useful as a platform for other distributed applications. The most notorious among them are:

• SETI@Home - searches for radio evidence of extraterrestrial life
• World Community Grid - research of HIV/AIDS, cancer, dengue fever, malaria
• Einstein@Home - searches for gravitational signals emitted by pulsars
• Rosetta@Home - helps researchers develop cures for human diseases
• Climate Prediction - studies climate changes around the globe
• Cosmology@Home - searches for the mathematical model that best describes our Universe
• LHC@Home Classic - improves the design of the CERN LHC particle accelerator

BOINC is already popular, with nearly 3,000,000 users worldwide, who donate their processing power to the total of 81 different projects. Powered by Gridcoin community, the network is likely to become one of major tools in any scientific research.

Ready for Gridcoin?

Below is a list of links that should get you started.

The official Gridcoin website: www.gridcoin.us
Gridcoin-QT for Windows: www.gridcoin.us/download/gridcoin.zip
CgMiner for Windows: www.gridcoin.us/download/cgminer-3.5.0-windows.zip
BOINC for Windows: boinc.berkeley.edu/dl/boinc_6.6.38_windows_intelx86.exe
Mining instructions: www.gridcoin.us/download/GridCoinMiningInstructions.pdf

The main thread on BitcoinTalk: bitcointalk.org/index.php?topic=324118.0
The first GRC giveaway thread: bitcointalk.org/index.php?topic=324341.0

How can you help?

Gridcoin is only 2 weeks old, and it badly needs you to spread the word out. There are already some initiatives, that aim to help the project. One of them is a petition to list Gridcoin on the major cryptocurrency exchanges. More initiatives are needed.

Exchange Gridcoins. Every pizza you buy is nothing but a long term investment on your behalf. Money should work, otherwise it is as good as useless.

Give some food to the miners - make transactions, even a small ones. Every transaction you make is another happy miner with 150 GRC in his hand.

Donate, and let others donate. Every giveaway thread you create brings more attention to the currency. The more attention it gets, the more valuable your share becomes.

The World Currency

Despite three decades' research on e-cash by the cryptographic community, all these efforts seem to have been dwindled by the swift success of Bitcoin. Has Nakamoto, a single individual whose name previously unheard of, outsmarted the ingenuity of all the cryptographers combined? Although Bitcoin uses no fancy cryptography, its design actually reflects a surprising amount of ingenuity and sophistication. Most importantly, it addresses the incentive problems most expeditiously.

No central point of trust.

Bitcoin has a completely distributed architecture, without any single trusted entity. Bitcoin assumes that the majority of nodes in its network are honest, and resorts to a majority vote mechanism for double spending avoidance, and dispute resolution. In contrast, most e-cash schemes require a centralized bank who is trusted for purposes of e-cash issuance, and double-spending detection. This greatly appeals to individuals who wish for a freely-traded currency not in control by any governments, banks, or authorities — from libertarians to drug-dealers and other underground economy proponents (note that apart from the aforementioned illegal usages, there are numerous legitimate uses as well). In a spirit similar to the original motivation for a distributed Internet, such a purely decentralized system guarantees that no single entity, no matter how initially benevolent, can succumb to the temptation or be coerced by a government into subverting it for its own benefit.

Incentives and economic system.

Bitcoin's ecosystem is ingeniously designed, and ensures that users have economic incentives to participate. First, the generation of new bitcoins happens in a distributed fashion at a predictable rate: "bitcoin miners" solve computational puzzles to generate new bitcoins, and this process is closely coupled with the verification of previous transactions. At the same time, miners also get to collect optional transaction fees for their effort of vetting said transactions. This gives users clear economic incentives to invest spare computing cycles in the verification of Bitcoin transactions and the generation of new Bitcoins. At the time of writing the investment of a GPU to accelerate Bitcoin puzzle solution can pay for itself in 6 months.

Predictable money supply.

Bitcoin makes sure that new coins will be minted at a fixed rate, that is, the larger the Bitcoin community and the total computational resource devoted to coin generation, the more difficult the computational puzzle becomes. This provides strong incentives for early adopters — the earlier in the game, the cheaper the coins minted.

Divisibility and fungibility.

One practical appeal of Bitcoin is the ease with which coins can be both divided and recombined to create essentially any denomination possible. This is an Achilles' heel of (strongly anonymous) e-cash systems, because denominations had to be standardized to be unlinkable, which incidentally makes the computational cost of e-cash transactions linear in the amount. In Bitcoin, linkage is inherent, as it is what prevents double spending; but it is the identities that are "anonymous".

Versatility, openness, and vibrancy.

Bitcoin is remarkably flexible partly due to its completely distributed design. The open-source nature of the project entices the creation of new applications and spurs new businesses. Because of its flexibility and openness, a rich extended ecosystem surrounding Bitcoin is flourishing. For example, mixer services have spawned to cater to users who need better anonymity guarantees. There are payment processor services that offer gadgets venders can embed in their webpages to receive Bitcoin payments alongside regular currency.

Scripting.

Another salient and very innovative feature is allowing users (payers and payees) to embed scripts in their Bitcoin transactions. Although today's reference implementations have not fully utilized the power of this feature, in theory, one can realize rich transactional semantics and contracts through scripts, such as deposits, escrow and dispute mediation, assurance contracts, including the use of external states, and so on. It is conceivable that in the future, richer forms of financial contracts and mechanisms are going to be built around Bitcoin using this feature.

Transaction irreversibility.

Bitcoin transactions quickly become irreversible. This attracts a niche market where vendors are concerned about credit-card fraud and charge-backs. Through personal communication with a vendor selling specialty magazines, he mentioned that before, he could not conduct business with customers in certain countries where credit-card fraud prevails. With Bitcoin, he is able to extend his business to these countries due to the protection he obtains from the irreversibility of transactions.

Low fees and friction.

The Bitcoin verifiers' market currently bears very low transaction fees (which are optional and chosen by the payer); this can be attractive in micro-payments where fees can dominate. Bitcoin is also appealing for its lack of additional costs traditionally tacked upon international money transfers, due to disintermediation.

Readily available implementations.

Last but not the least, in comparison with other e-cash schemes, Bitcoin has provided readily available implementations, not only for the desktop computer, but also for mobile phones. The open-source project is maintained by a vibrant community, and has had healthy developments.

How does Bitcoin work?

Bitcoin is open-source democracy in action: its users wield the power. All balances and transactions are handled by a connected network of computers like yours. This peer-to-peer system is so efficient that it can support more users than VISA and MasterCard combined.

Because Bitcoin has no central authority, nobody apart from you can control or limit your transactions. With Bitcoin, you are your own boss and your money is always safe.

To be able to use Bitcoin, you need to get a Bitcoin wallet. A wallet is a text address that contains Bitcoins and only you can access. It is like an anonymous bank account. You can create as many different Bitcoin addresses as you want without ever sharing any personal information.

Each Bitcoin wallet has a unique key. These keys are secured with a stronger encryption (SHA-256 and ECDSA) than the one used by the world's foremost banks. This makes Bitcoins safer than any other currency in the world.

Example of a Bitcoin address: 1dice8EMZmqKvrGE4Qc9bUFf9PX3xaYDp

Bitcoin addresses are case-sensitive and created automatically. Don't worry too much about writing one down incorrectly, the chance of a mistyped address being real is more than one in four billion.

What is Bitcoin?

The idea of currency – that something of value can be exchanged for goods or services – goes back thousands of years to cattle and cowrie shells. Bronze and copper coins pop up around 1000 BC, with silver ones coming into existence roughly 500 years later. The Chinese developed paper money in 806, watched it disappear in 1455, then show up again a few centuries later. Europe, the United States and the rest of the world followed suit. Now central banks regulate money, citizens pay with coins, paper bills, or with debit and credit cards. (The companies distributing the cards profit from fees, of course.)

Satoshi Nakamoto had a different vision: Bitcoin. A document that he uploaded to a cryptology listserve in 2008 – in the middle of the global financial crisis – outlined the plan that didn't rely on governments or central banks. The details are complex, but the simple version is that a network of users keeps track of every Bitcoin transaction by adding each one to the 'block chain.' People use computing power to solve cryptographic puzzles, 'mining' blocks at a rate of about six blocks per hour. The first person to successfully mine the block receives a reward, currently set at 50 Bitcoins. Every 210,000 blocks – roughly four years – the reward is cut in half. By 2140, 21 million Bitcoins will be floating around the digital world. The fixed supply allows Bitcoins to gain value.

On January 3, 2009, Nakamoto mined the first 50 Bitcoins himself. Over the next two years, two things happened: the open source money slowly, steadily, gained traction among a certain subset of technogeeks, libertarians and other early adopters, and Nakamoto disappeared.

The second issue first. No one knew the identity of the Bitcoin creator. He might have been a single person, a group or something else entirely. But by December 2010, he – or it – was gone. While the disappearance surprised the growing Bitcoin community, it also helped. "In a way it's a good thing for the community that he's gone. It's like religion. We had some of the regimes in the 20th century become 'atheist' and replace religion with quasireligions around their heads of state and look what happened. It's better for society in general when central rallying points are more abstract,” Vitalik Buterin, head writer for Bitcoin Magazine, wrote over Skype. (That nearly everyone in the Bitcoin community communicates primarily over Skype gives a sense of the currency's worldwide userbase.)

Nakamoto was gone, but Bitcoin continued to gain traction. The digital currency, which wasn't worth anything initially, suddenly was. A lot, in fact. In February 2011, one Bitcoin could be exchanged for roughly $1 USD. Just four months later, on June 9, one Bitcoin was worth nearly $30 USD. Although the market crashed to around $3 USD by October, it rebounded and hovered around $12 USD in December 2012.