Gridcoin - The Cryptocurrency for Helping the Advanced Science
In 2013, Robert Halförd invented Gridcoin as an open-source cryptocurrency. It should improve the perception of cryptocurrencies. One major point in the discussion against these cryptocurrencies was the energy consumption, thus its wasteful nature. The Forbes magazine stated that the Bitcoin network used electricity worth 15 Million US Dollar daily in 2013, just to keep it running. In 2017, Ars Technica reported that the virtual currency Bitcoin is consuming as much energy as Denmark.
The basic algorithm to mine Bitcoin does not provide benefit for society apart from securing Bitcoin itself. But the security of transactions does not need to be energy consuming, as we can see from SSL-signed online-banking sessions. Gridcoin as an improved alternative and open-source cryptocurrency can provide similar security by peer-to-peer signature mechanisms, opposing this massive waste of energy. Moreover, Gridcoin mining consists of research computations in the BOINC network - thus, mining becomes useful with Gridcoin.
History of Gridcoin
Since 2013, Gridcoin as a new cryptocurrency has evolved. First, it was still based on the Proof-of-Work algorithm, accounting for 50 % of the used computation power. The other half of the computation power of a participating computer was provided for the Proof-of-Research algorithm. Thus it could help with computing tasks within the BOINC network in international research and volunteer computing projects. Now we call this deprecated technology Gridcoin Classic with the former ticker GRCX.
In 2014, Gridcoin Research was born. Later it became the cryptocurrency Gridcoin we now know as GRC. The Proof-of-Work algorithm was replaced with the more energy-efficient Proof-of-Stake algorithm. Leaving nearly 100 % of a devices computation power for useful computations. The original blockchain of Gridcoin Classic was not continued after a six month long time frame. In that time frame users could exchange their GRCX to GRC with a factor of ten.
When the conversion period began, Gridcoin Classic counted about 34 Million Gridcoin Classic Coins. 340 Million Gridcoin Research Coins, or GRC, were included in the Gridcoin Research genesis block. About 10 % of those cryptocurrency units have never been claimed during the conversion time frame. These units are now determined to be the Gridcoin Foundation funds. The community decided to use them for marketing, advertising, promotions and development.
Gridcoin development brought up several unique features discussed below. Amongst those is the possibility of a decentralized poll on the blockchain on any topic, especially on how the Foundation funds should be used. Gridcoin developed its own Neural Network that securely keeps track on how much every Gridcoin miner, thus BOINC researcher in team Gridcoin, is owed in a decentralized manner. While miners of most other cryptocurrencies do get paid only for the timeframe between 2 blocks, Gridcoin miners accrue their research rewards for up to 6 months.
In 2017, Gridcoin was rebranded and got a new color scheme as well as a new logo. The old logo has been considered being too complex.
How Gridcoin compared to other cryptocurrencies works?
The system Gridcoin is based on is very different from other cyrptocurrencies. For example, Bitcoin, Litecoin and Ethereum use the Proof-of-Work concept. These virtual currencies require the computing power of their user's to maintain their network by wasting their energy to make pointless calculations. These are used to confirm transactions, generate a new block in the blockchain and as result reward miners with coins. The amount of the reward depends on the effort of the user to find the correct hash of the block. Miners compete to find the correct hash to complete transactions and get rewarded for it.
The energy-efficient cryptocurrency Gridcoin instead uses the active Proof-of-Research and the energy-efficient Proof-of-Stake concept. The Proof-of-Research concept rewards their users for providing their computing energy to scientific research. The Proof-of-Stake concept instead rewards the user dependent on his money in his wallet. Both concepts lead to currently two types of participants in the Gridcoin network that are called Crunchers or Researchers and Stakers or Investors.
A Researcher is an active cruncher or miner and a participant in the BOINC network. He shares his computing power with one or more BOINC project(s). Crunchers are based on the Proof-of-Research concept. The amount of rewards that a Researcher gets regarding his effort depends on the research done within (up to) the last 6 months.
An Investor is another participant of the Gridcoin ecosystem who holds Gridcoins in his wallet without doing active research. By holding his Gridcoins in his wallet he protects and advances the Gridcoin blockchain by generating new blocks on the network. How often the Staker generates new blocks depends on how much Gridcoins he owns. The stake-reward strategy will give the Investor roughly 1.5% of an annual interest rate by staking blocks.
How are Gridcoins generated?
There is only one way to generate new Gridcoins: a user has to create a block within the Gridcoin blockchain. Therefore the user needs Gridcoins that already participate in securing the blockchain to start with the Proof-of-Stake algorithm. Optionally, the user can join crowd computing within the BOINC network to increase the block subsidy and therefore generate more Gridcoins by creating a block. The amount of Gridcoins generated in a block depends on two parts: First, the number of Gridcoins the user has for securing the blockchain. No coins are lost in the process. Second, their relative BOINC contribution measured against the whole Gridcoin network BOINC contribution.
How is the amount of Gridcoins generated in a block being calculated?
A block reward necessarily includes interest and optionally contains research subsidy.
Interest: The interest rate is 1.5% per annum. For example, six months after their last transaction or block creation, 1000 GRC will generate about 7.5 GRC of interest. The owner can collect that by creating a new block in the blockchain.
Research: The research subsidy is added to the interest on block creation with the formula: = Magnitude x Magnitude Unit x days. For example, a user has a magnitude of 10. The magnitude unit is about 0.25. 30 days after their last transaction or block creation, 1000 GRC will generate about 1.25 GRC of interest. Plus 10 * 0.25 * 30 = 75 GRC of research subsidy once they create a block.
What are the main features of Gridcoin?
Gridcoin as open-source cryptocurrency offers features like Proof-of-Research, On-Chain Voting, and a Neural Network for secure reward calculations. These features come on top of the nature of a blockchain, allowing (international) transactions and payments within seconds. As an open-source software, it additionally allows anyone to take part in the world of distributed computing and cryptocurrencies.
The most important feature of this virtual currency is its ability to reward BOINC research projects. Thus, Gridcoin boosts the incentive to participate in distributed science and crowd computing. Mining Gridcoin means helping researchers to find answers to problems and questions. Like how cancer can be cured, how the galaxy has come to the existence or what the components of atoms are.
- On-Chain Voting
Another major feature is the ability for Gridcoin investors and miners to vote on any topic that needs a consensus. The single votes are being broadcasted to and stored in the blockchain as persistent and immutable proof of the expression of the vote. Among other decisions, usages of the Foundations funds are being voted upon. As a result of this feature, the Gridcoin community is able to find a completely decentralized consensus.
- Neural Network
The Gridcoin Neural Network is a distributed instance composed of Gridcoin nodes. Each node participating in the Neural Network downloads all data of the Gridcoin researchers in every BOINC project. Then it calculates the relative strength of research of every researcher. This is the basis for calculating each researchers Proof-of-Research mining output, expressed in the user's magnitudes. Once a day, all participating nodes are forming a consensus on which list of magnitudes is correct. This consensus is then written on the blockchain in a superblock.
Eventually, the Gridcoin Neural Network is supposed to handle more than just the payment checks. It is possible that it securely distributes a snapshot of the blockchain to get a new node synchronized fast, or that it carries other important information.
What are the benefits of Gridcoin as rewarding cryptocurrency?
The advantages of using this cryptocurrency are:
- Participation in the BOINC network to help advance science
- Combines the Proof-of-Research and Proof-of-Stake concept
- Coins from Gridcoin are very energy efficient
- Gridcoin has a target block time of 90 seconds, thus transactions are quick to confirm
- Easier to purchase items from merchants
- Individual distributed mining
- Payments within six months will completely pay a researcher/miner or an investor without any loss of coins
- Less need for mining pools
What does PiGrid as All-In-One Solution for Gridcoin?
Our PiGrid Software was developed to reduce the complicity to join easily the world of the virtual currency Gridcoin and the open-source research platform BOINC. Mainly it combines the features of a Gridcoin wallet and a BOINC client. As an all-in-one solution, it will take care of handling your cryptocurrency securely and be at the same time a paid member of international research as well as distributed computing projects. Use our PiGrid Software on your Raspberry Pi to become a paid home-based researcher and a cryptocurrency user. Buy PiGrid now.
Further information about blockchain and cryptocurrency can be found in the PiGrid Shop under "Learn more".
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