This new Bitcoin mining system would reward people for storing data

Other than generating lucre, Bitcoin mining does nothing but waste time and energy. That’s why researchers from Microsoft and the University of Maryland have developed “Permacoins” which reward you for actually doing something useful: backing up important data to your hard drives. For instance, you could earn crypto-coins by helping store, say, the 200TB US Library of Congress to your own disks. You wouldn’t be able to cheat and use Dropbox or Google Drive thanks to an encrypted key, and data would be validated using a “proof of reliability” check. With enough participation, it would provide a safe, distributed backup and enable data to be accessed during outage.

Researchers have proposed a system which could see Bitcoin users earning their trendy tender by replicating vital data sources rather than crunching pointless algorithms. The new system, dubbed Permacoin by a team of University of Maryland and Microsoft researchers, would substitute the current requirement to obtain Bitcoins through crunching mathematical algorithms with a system where punters replicated important datasets. It would function as a “free” guard against wholesale data losses from cloud providers, and could see valuable sources such as the 200Tb US Library of Congress backed-up if it were applied to the current Bitcoin network, researchers wrote in a paper (pdf). In the case of the recent US Government shutdown in which agencies were shuttered for two weeks, the network would have ensured the Library of Congress was accessible. PhD Andrew Miller said this would bolt-on a “massively diverse global replicated storage system” to crypto-currency mining.