Decentralised Currencies Are Probably Impossible

Decentralised Currencies Are Probably Impossible – But Let’s At Least Make Them Efficient -2011

Lately, there’s been a good deal of excitement about Bitcoin, an (allegedly) decentralised currency, based on proof-of-work.  I explore the limitations and costs of Bitcoin and introduce an efficient alternative.  Both Bitcoin and my alternative proposal suffer from a problem for which there is no known solution: creating consensus in a group with open, changing membership.   But at least my proposal fails in an energy efficient way, unlike Bitcoin.

1 comment to Decentralised Currencies Are Probably Impossible

  • m

    Some thing I thought about lately, a 3 key system for address locking 3+ address’s to a user.

    Key #1 is the encrypted machine information code. It’s gathered from the mother board, MAC address(‘s) and part of IP
    other things that normally don’t change on the users computer, excluding the hard drive as it’s known to fail.
    Exactly what used is secert of the programmer. Wallet unreadable software make’s it each time.

    Key #2 is the encrypted passphase for address change’s of user’s address’s and never stored on clean machine.
    100-1000 character’s some thing very hard to guess.
    and only used if machine is broke stolden, or upgraded. Or replaced by totally new machine.
    this key is not used until this happen’s and never stored on block chain, always killed after use on chain.
    Stored Extenally on USB or CD, paper. 3 copy’s one in safe and one with trusted person and one for use.

    Key #3 is the encryption of key 1 and 2, stored online in the block when first used, (claimed), with a block id
    added to address’s. Maybe 2 id characters?
    Also stored on extenal drives only, unless thief has both machine and usb drive.

    How it could work: User’s wallet software look’s up 3 or more never used address’s after making key’s.
    Tells the block chain that the Address’s belong to user and give’s the 1st key and 3rd key. The 1st key is alway’s
    used and the 3rd key is stored on that block only for look up later. Each address is marked as “owned” on block chain.
    Key 1 is used to confirm ownership and can not be extracted from block chain by hackers. Nor from software.

    When the user lost computer or it’s broken:
    1.The Key 1 has changed and the Block chain ask’s for Key 2 then hashes the “old” key 1 with key 2 and confirm’s the key 3.
    3.It then accepts the “new” key 1. if not then it’s a hacker.
    4.It then hashs/makes the new Key 3.
    5.Sends Key 3 it back to wallet software into the 2-3 extenal drives.
    6. Save’s it in that block..
    7.After that block chain kills Key 2 and stores the new key’s 1 with address’s.
    8.Add’s new block id to address’s. Bad connection would make it start over, killing key 2 each time.

    User can claim ownership of Address’s and “Lock” or Unlock address(s) for incoming transactions. Need Key 2.

    A normal password for each address is still used, every thing else happen’s automaticly by the wallet
    software including messages to user.
    It could even turn off all un-needed services,bad software before running forcing a reboot after.

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