The history of cryptocurrencies in two parts

General discussion of CryptoNote based currencies and issues.

The history of cryptocurrencies in two parts

Postby Ray Patterson » Fri Jul 17, 2015 3:26 pm

Hello, members of Cryptonote Forum!

I spent some time to write an article about the history of Proof-of-Work, trying to mention every important point, starting from pre-bitcoin functions and then delving into every algorithm that shifted the further development and adoption of cryptocurrencies, namely:

    The Hashcash project
    Moderately hard, memory-bound functions
    Secure hash algorithms (SHA-2, SHA-3)
    Scrypt and its versions
    X11
    Momentum
    Cuckoo Cycle
    CryptoNight

Now, I'm excited to share it with you and hear your comments on it.

It will be incorrect to say that Satoshi was the first to think about using PoW for the digital currency. The idea of "reusable proof-of-work" had long been hovering among cryptoanarchists (and was implemented at some point, partially though), but it never got popular in its original concept.
The RPoW concept by Hal Finney proposed the "RPOW-tokens" to be inherent values (coins), while Bitcoin uses PoW only as a way to reach some distributed consensus (on the subject of which blockchain version should be correct), i.e. approved by the majority. This was the principal idea of Bitcoin that worked out.
Hashcash concept was selected as a proof-of-work scheme, and the SHA-256 was chosen as a computed function. It was the most popular hash function at that moment (2008). Most probably, the key factors were the simplicity of Hashcash and the 'commonality' of SHA-256. Satoshi added the 'difficulty factor' to the Hashcash (increasing or decreasing N - the required amount of zeros - depending on the number of participants) and, it seemed, secured clear decentralized future for everyone. Still, what happened later happened: GPU, FPGA, ASIC and even decentralized cloud mining.
There is no consensus on notion that "Satoshi (could) had foreseen" all this bedlam or not, but the fact remains: in September 2011, the first cryptocurrency that utilized a principally different PoW function appeared. Tenebrix used scrypt instead of SHA-256.


CryptoNight is the final and one of the most important parts of the article ;)

Part 1: https://bytecoin.org/blog/proof-of-work/
Part 2: https://bytecoin.org/blog/proof-of-work-part-2/

The futher discussion is welcome!
Ray Patterson
 
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Joined: Fri Jul 17, 2015 3:21 pm

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