6.02.2018

Proof of Work Squared: new method of human and computer hybrid proof of work POW^2

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A new method for securing and enabling the productivity of a blockchain is described wherein useful work and arbitrary work (proof of work, proof of space, proof of space-time, etc.) is used in tandem in order to generate and/or redistribute tokens/coins/etc.  Typically computers hashing generate new coins as well as generate fees for verifying transactions.  The reasons why computer hashing work is desired in order to provide a fair proof for coin generation is because it is hard to fake that work.  Winning a lottery is a good (enough) proof that you bought lots of lottery tickets. You are not going to consistently win lots of lotteries without buying lots of tickets.  There is literally no other way to win the lottery.  This is why hashing algorithms as a proof of work are desired because there is literally no way to win the block without doing tons of computationally and electrically expensive computations.  If, for example, you made the "proof" that you completed many successful transactions; well this can be 'gamed' by creating lots of transactions with yourself.  So you would never loose money because you kept it all yourself, yet you would be generating new coins in addition to what you already had by creating transactions with yourself.  So in order to add new coins fairly to a blockchain or other system you need to really make someone prove they are irreversibly spending their resources to obtain the new coins.  Using "completing successful transactions" would be a successful proof of work however only for redistribution of wealth.  What this means is as long as no new coins are generated in the process, someone wouldn't gain an advantage by doing transactions with themselves.  Just one of their accounts would pay the fee and the other one of their accounts would gain the fee.  So as long as no new coins are generated a fee based redistribution of wealth system works.

However we do want new coins generated.  Why? Because who is to decide the initial distribution of coins?  If a person or group of people decide this then we have a Centralized Digital Currency (CDC).  for a Decentralized Digital Currency (DDC) we want coins to be distributed in a way that is fair to anyone who wants to participate.  Hashing algorithm proof of work is currently the best way to guarantee this fair initial distribution.

Why not proof of stake?  While proof of stake is a good way to prove something, namely that you own coins and are not spending them, this is a terrible way to initially distribute or redistribute coins.  Why? Because it is the opposite of Robin hood, this is taking from the poor to pay the rich (those able to stake large amounts of coins).  So proof of stake can be renamed "Proof of Riches" and "Proof of Hoarding" and that makes no sense and has no place in a decentralized system that is aiming for fairness and where you actually want people to spend and trade the coins not just sit on them.

The reason we would rather not the computers hashing to generate the fees is because then they are double dipping in initial distribution and redistribution.  It would be better if arbitrary work is only used in things that must be proven (initial distribution) and useful work was done for things that cannot be easily gamed (redistribution).   This way real useful work can be incorporated into a blockchain or any other system.

This new method would separate the fee generation from the creation of new coins.  There may be a fixed maximum number of coins or infinite, but preferably infinite.  It could also work where there are fees along with generation of new coins by hashing algorithms (or any other arbitrary proof), and an additional fee for useful work.

A computer using a hashing algorithm will be used to create new coins just like any typical blockchain proof of work currently.  Any hashing algorithm can be used.

A human (or animal or anything including AI) doing useful mental/physical/spiritual or any other type of useful work will be used to generate fees.  This can take any form.  For example a decentralized trading and shipping platform could have nodes set an equation or fixed amount for what they charge to physically ship an item a given distance.  This fee could be subtracted from the coins that were sent in payment for the good(s) between the buyer and seller.

In this way an entity performing a hashing algorithm creates new coins in the network, and an entity performing useful work gains transaction fees in the network.

This can be used for any purpose and/or as part or whole of and/or added as another layer on top of or as a service to any decentralized or centralized system.

This is an open source invention/patent and can be used and plagiarized for any purpose whatsoever.

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