One of the coolest things about my job as a cryptocurrency enthusiast is that I get to learn about all kinds of different ways people have changed Satoshi’s initial idea.
Some ideas are… let’s say “misguided”. Like Bitconnect. Others are revolutionary, and work to build upon the work already laid out. My favorite thing to cover in the space is how blockchains produce their blocks.
I have covered Directed Acyclic Graphs (DAG) in a previous article. This is actually a different way to do distributed ledger technology. The “Original Gangster” method of the crypto space is PoW (Proof of Work).
PoW is still in vogue with a LOT of different coins out there, including the Numero Uno: Bitcoin. That being said, there is a relatively new player in the Wild West and they wanna change how we do blocks with something called Conditioned Proof of Capacity.
So, What is This Conditioned Proof of Capacity Magic I Speak Of?
In order to get a good feel on what exactly Conditioned Proof of Capacity means, we must take a really quick dive into Proof of Work. Why? Because Conditioned Proof of Capacity serves as a potential improvement on PoW.
So, here’s the basics. Let’s say I’m a Bitcoin miner. I have my super awesome ASIC rig set up in my dorm room, and I’m killing it with the ladies because I have a lot of money from my mining efforts, since I don’t have to pay for the electricity in the dorm.
Basically, my rig tries to find a proper hash value by changing something called a block header. It takes a METRIC ASS TON of changing those numbers really really fast in order to be the first one to find the correct value. Once I get that done, I can then broadcast it to the network as the next block in the chain. For that WORK, I receive a fancy reward for my troubles. For Bitcoin, that fancy reward is (currently) 6.25 BTC. Before May 11th of this year (2020), it was 12.5 BTC.
Conditioned Proof of Capacity (CPoC) on the other hand.
Conditioned Proof of Capacity works the “other way around” so to speak. Instead of using processing power to find the correct hash value, CPoC stores potential values of the hash onto empty space on a hard drive. These values are then compared to the header of the block, and when one matches, the miner gets the block reward. The more empty space one has to contribute to storing potential hash values, the better chances one has to get the right value.
In many ways, this is like a lottery. For example, let’s say you go to the convenience store and wanna buy a powerball ticket. You buy just one or two numbers for fun, just to see if you’ll make it. it’s a longshot, but theoretically possible that you will win the Powerball.
While you’re waiting in line, you notice that Marge is ahead of you. She is 65 years old, smokes like a chimney, and spends half of her social security check on Powerball Lotto numbers each month. Frankly, you’re surprised how she manages to get around without a scooter.
Coughing and hacking her lungs out, she finishes her purchase of Marlboro Reds, Winecoolers and about 350 numbers for this week’s lotto. She has a MUCH better chance of having the winning numbers than you do with your measly two numbers.
That’s basically what Conditioned Proof of Capacity is; Dedicate more hard drive space for a chance to win the block. Under normal circumstances, being a Marge means that you’re probably gonna die within the next 5 years and win nothing. In the world of CPoC, You are rewarded for being addicted to storing numbers.
My Take on Conditioned Proof of Capacity
So, originally I was a bit skeptical on how well this might work. However, after reading more about it, I found that this just might be a better way to go. It is said that CPoC uses 30 times less energy than Proof of Work, and the barrier to entry is pretty low. You could dedicate extra space on damn near any device you have and play the game.
One of my largest concerns about this technology is that it pushes the problem of processing away from the miners. Despite the fact that people are using less energy to store the hashes on empty disk space, those hashes still need to be sorted through and matched.
That type of activity certainly still takes some sort of calculation power. However, what the hell do I know? It must be the case that indexing and searching for a particular value in a hard drive becomes more efficient. Having a computer generate billions of them with brute force processing power must be harder.
In an Alternate Universe…
There are concerns about adoption as well as the potential for malware in CPoC, but honestly, I am imagining a world where Satoshi came up with this instead of PoW.
Think about it; there could be huge mining warehouses in china with literally hundreds of petabytes of digital storage, all of it waiting to hit the next block in the chain. People would be innovating like crazy until we could store tens of terabytes of storage into a space smaller than a fingernail. That would be an interesting world to live in. Sadly, this hasn’t taken off as quickly as one would hope, but perhaps with time, that might change.
Thanks for reading, I really appreciate it. Please feel free to read more of our stuff just like this if you liked it.
Until next time, keep your eyes on the markets, and be more like Marge. Maybe without smoking.