Wouldn’t it be great if the next wanna be bitcoin clone tried to do something useful with the work done in mining, rather than mindlessly compute sha25 hashes?
The first attempt at this that I recall was a few months ago: integrating a btc-like coin with protein folding computations. I think it fizzled. Possibly a scam.
And now, or rather the last 30 days, Primecoin has stolen the limelight in the altcoin universe. Primecoin, the creation of Sunny King (ppcoin), seems to be a serious effort. It implements a proof of work function linked to finding novel prime numbers.
For any proposed Altcoin That Wants To Do Something Useful, the hard part is finding a proof of work function with a scalable difficulty. Primecoin’s solution for this is interesting. Obviously you can’t do the naive thing and just link block creation to finding new prime numbers because the difficulty of this will only increase. So how to do difficulty adjustment? The meat of the idea seems to be captured in this reddit/bitcoin comment, pasted from the whitepaper:
A little hard to follow, but 1M USD seems to think it’s legit.
Vircurex chart for primecoin:
Typical chart for a ten day old altcoin after listing: down 50%, up 70%, and back where it started now. But for the miners that jumped on PMC before listing, a big payday seems to be in the works.
In barely over a week, this coin has captured ten basis points of the bitcoin market cap, over $1M USD. This puts it as the sixth highest altcoin by marketcap, barely a month after announcing and 10 days after going on the altcoin exchanges.
Primecoin is on the scope. But with 33% of the marketcap of litecoin, is there still room to grow?
Maybe. Questions are mounting as to whether MtGox will ever list litecoin. If it doesn’t this could trigger a fall in litecoin and value dispersion to more promising altcoins, of which primecoin is certainly a value sink. On the other hand, while the early miners have accumulated a lot of PMC, but they also have large USD bills at linode and other vps providers to pay. We could be looking at a down leg in the next couple of days (or hours) as the miners sell to cover costs.
Recommendation: mine if you can, and put in low buy orders — that is, under market, now hovering around 0.01 PMC/BTC. 0.005/0.006 looks reasonable to me. We’ve been mining in “curious” mode for 5 or 6 hours.
One final point for reflection, from my colleague Mike. Is finding new primes actually useful? It *sounds* useful, and the meteoric rise in marketcap reflects this overall sentiment. But what actual problem does this really solve? Protein folding — that’s useful. Alas, there’s no (known) way to scale the difficulty up and down when you’re solving folds. Prime discovery, you can scale the difficulty up and down, and it sounds useful, but actually useful? And if it’s not, how does this figure into the future price?
Looking forward to feedback, especially on the last point.