Bitgold crypto
In the bit gold structure, a user must solve a cryptographic puzzle using computing power. All solved puzzles are sent through a Byzantine Fault Tolerant BFT peer-to-peer network and then assigned to the public key of the puzzle solver.
Details relating to the transaction are stored in a title registry analogous to a blockchain in the consensus system because it offers an immutable record of and order for transactions that have taken place. This is similar to the block creation process in bitcoin, where hash addresses are used as headers pointing to the next set of blocks.
This means that different quantities of bit gold should be combined in order to make a single transaction. Instead of a centralized authority controlling its levers, the bit gold functions on a decentralized and distributed system of trust between the individual nodes—or participating computers—that make up its network. And although there is some circumstantial evidence, there is no proof that Nakamoto is Szabo. In , before the bitcoin whitepaper was published, Szabo authored a comment on his blog that said he was creating a live version of his hypothetical currency.
Although bit gold and bitcoin are similar, there are some very clear differences between the two projects. Szabo envisioned that the difficulty of mining bit gold would vary over time. It would not necessarily get easier or harder, but there would be fluctuations in the amount of bit gold that was able to be created at various different points in time. On the other hand, bitcoin is designed so that it gets harder to mine bitcoin over time.
There is also a finite supply of bitcoins. More importantly, bit gold was never intended to be electronic money itself, like bitcoin. Bit gold was created as a reserve currency to back another form of electronic currency. In this way, bit gold was intended to act like physical reserves in the era before fiat currency. Goals of Bit Gold Szabo said he created bit gold to address some of the inefficiencies in the traditional financial system.
Transporting large values of metal can be a rather insecure affair, as the British found when transporting gold across a U-boat infested Atlantic to Canada during World War I to support their gold standard. What's worse, you can't pay online with metal.
Thus, it would be very nice if there were a protocol whereby unforgeably costly bits could be created online with minimal dependence on trusted third parties, and then securely stored, transferred, and assayed with similar minimal trust. Bit gold. My proposal for bit gold is based on computing a string of bits from a string of challenge bits, using functions called variously "client puzzle function," "proof of work function," or "secure benchmark function.
Where a one-way function is prohibitively difficult to compute backwards, a secure benchmark function ideally comes with a specific cost, measured in compute cycles, to compute backwards. Here are the main steps of the bit gold system that I envision: A public string of bits, the "challenge string," is created see step 5. Alice on her computer generates the proof of work string from the challenge bits using a benchmark function.
The proof of work is securely timestamped. This should work in a distributed fashion, with several different timestamp services so that no particular timestamp service need be substantially relied on. Alice adds the challenge string and the timestamped proof of work string to a distributed property title registry for bit gold. Here, too, no single server is substantially relied on to properly operate the registry. The last-created string of bit gold provides the challenge bits for the next-created string.
To verify that Alice is the owner of a particular string of bit gold, Bob checks the unforgeable chain of title in the bit gold title registry. To assay the value of a string of bit gold, Bob checks and verifies the challenge bits, the proof of work string, and the timestamp. Note that Alice's control over her bit gold does not depend on her sole possession of the bits, but rather on her lead position in the unforgeable chain of title chain of digital signatures in the title registry.
All of this can be automated by software. The main limits to the security of the scheme are how well trust can be distributed in steps 3 and 4 , and the problem of machine architecture which will be discussed below. This relies on publishing the computer code for the "mint," which runs on a remote tamper-evident computer.
The purchaser of of bit gold can then use remote attestation, which Finney calls the transparent server technique, to verify that a particular number of cycles were actually performed. The main problem with all these schemes is that proof of work schemes depend on computer architecture, not just an abstract mathematics based on an abstract "compute cycle.
Thus, it might be possible to be a very low cost producer by several orders of magnitude and swamp the market with bit gold.
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Bitgold crypto investing activities include collecting cash on loans made by investors
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