It's called Primecoin. By rewarding miners who find elusive chains of prime numbers, is the so-called 'altcoin' poised to take holistic virtual currencies beyond the bank?
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Some of us are taken with bitcoin. We have learned its basics, and are more or less versed with its socioeconomic implications. We get it.
But when an acquaintance of mine told me recently that he's trading in more than 30 bitcoin alternatives, or altcoins, my mind was blown. Acting as a sort of crypto-FOREX trader, he's the first to answer one of my go-to questions on bitcoin: What would you do to make it better?
He rattled off some of the altcoins, and eventually focused his argument around a week-old cryptocurrency. It's called Primecoin, and it aims to harness what he considers to be the spent energy of bitcoin's algorithm.
"A lot of bitcoin is creating garbage," he explained. "Every now and then—roughly every 10 minutes—it produces a valid block, which is very valuable; currently worth $2,000-plus. But otherwise, it's crap, and very wasteful. Well, digitally speaking."
He was referring to bitcoin's alpha-numeric SHA256 hashes, the computations that find bitcoins and burn up bitcoin-mining gear for no other sake than to produce more bitcoins and secure the network with proof-of-work. Primecoin is also based on a proof-of-work method, but it rewards its miners as they find elusive chains of prime numbers. As Sunny King, author of Primecoin's white paper and method, put it:
Primecoin is the first crypto-currency on the market with non-hashcash proof-of-work, generating additional potential scientific value from the mining work. This research is meant to pave the way for other proof-of-work types with diverse scientific computing values to emerge.
Incentivizing cryptocurrency by using mining methods to advance number theory may seem trivial. But it may lead to greater fortunes. Bitcoin Magazine pointed out that the Electronic Frontier Foundation "is offering $550,000 worth of prizes" to whichever groups are first to uncover a prime number more than 1 million, 10 million, 100 million, and 1 billion digits long. The first two—1 million and 10 million—have already been accounted for.