Here is an interesting question: can we build a POW system be 'more useful'
Technical points aside, u/dg123 highlights an important issue: making the POW 'useful' actually decreases the security of the bitcoin chain, because mining hardware would have value independent of mining.
In other words: with a 'useful POW', if miners tank the value of bitcoin by attacking, they would suffer less of a loss on their hardware, effectively lowering the cost of attack substantially.
Beyond the POW algo, the same argument can be extended to the mining hardware itself. The more specialized it becomes, the more secure the network.
If you're mining with an ASIC that is *only* useful for mining, you'll be invested in maintaining the network's utility. If the network fails, your investment becomes worthless!
If you're mining with a general-purpose chip and the network is attacked, you can always just switch to mining a different coin (or sell the chip to gamers, etc).
@htimsxela Mining is useful to Bitcoin only in the measure it is useless for any other scope. A useful POW has the same effect of stop using a % of the hardware for mining and reallocating it to some other task
@htimsxela I find the conclusion interesting but I question the premise of this. Please elaborate on how "miners tank the value of bitcoin by attacking."
@ChildrenOfAristotle in general this would refer to the often-assumed outcome of a 51% attack: that the exchange rate of bitcoin would tank, because the network would become controlled/unreliable.
Whether the 51% attacker simply orchestrates a large double-spend against an exchange, or sustains an empty-block attack, the outcome is that the network's utility and security is compromised, and thus it's value declines.
@htimsxela I see. This is a different sort "value tanking" than the market manipulation I was thinking of.... Should've remembered I'm in the *bitcoinhackers* instance!
Can you point me to more info on an empty-block attack. I've not heard of that one before.
@ChildrenOfAristotle An empty-block attack is fairly straightforward if you understand how a 51% attack works:
The attacker mines empty blocks exclusively, and only mines on top of their own blocks.
Having the majority of the hashpower, their empty-block chain will outrun the rest of the miners. So nodes will follow the empty-block chain, and any other blocks found by other miners will be orphaned.
This is also referred to as censoring txs. See bullet pt 3 here: https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power
@htimsxela Thanks for the link. I knew about 51%, of course, but the way @aantonop has explained it, it seems so expensive and difficult to do, especially as time has gone on. I just can't imagine why a miner would want to waste resources and destroy their investment...
Similarly, this empty-block attack also sounds costly to anyone other than a state actor (or antminer producer). Perhaps that's specifically who/what you're talking about, judging by your recent Toot. :)
I also agree that a 51% attack of any form is unlikely though, and my original toot is related to this: a ‘useful’ POW would affect the game theory, effectively lowering the cost of attack. Obviously, keeping the cost of attack high is desirable!
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