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.