Bitcoin has been regarded as the first digital currency developed in 2008 by developer Satoshi Nakamoto. But most view Bitcoins are created by solving mathematical puzzles and that involves huge computation and resource investment. The method of encryption used to secure Bitcoin transactions employs heavy and lengthier encryptions and thus consumes considerable computer resources.
However, Microsoft and the developers from the University of Maryland, have developed a Bitcoin which is a useful one, it is called as Permacoin.
Permacoin repurposes the mining resources to achieve a more broadly useful goal: distributed storage of archival data.
Permacoin vs Bitcoin
Unlike Bitcoin that depends wholly on computational power, Permacoin rely less on computational power and more on storage space.
Microsoft mentioned in a blog post,
“We call our new scheme Permacoin. Unlike Bitcoin and its proposed alternatives, Permacoin requires clients to invest not just computational resources, but also storage. Our scheme involves an alternative scratch-off puzzle for Bitcoin based on Proofs-of-Retrievability (PORs). Successfully minting money with this SOP requires local, random access to a copy of a file. Given the competition among mining clients in Bitcoin, this modified SOP gives rise to highly decentralized file storage, thus reducing the overall waste of Bitcoin”.
Making sense of this new system, Permacoins would bring a useful chunk of data to public. This would decrease dependence on cloud providers or on Government offices and repositories that may be closed or restricted.
Users will be able to add their own data to the archive so that it can be recovered in case of an unexpected data loss. The data will also need to be saved only locally and not on any cloud service that may actually suffer from a data crash resulting in loss of the entire data.
The idea of Permacoins sounds a great one as it rewards users who create something useful using their computational talent and storage space. The project as of now is still in the research phase and we wish that it soon turns out to be a real useful one.