Bitcoin without mining

Several months ago I've stumbled an interesting question about the Ripple system: How does Ripple solve the double-spend problem?

Specifically about how double-spending is solved in Ripple. As you can see only @David Schwartz replied to my comments and only he was able to give an answer, given that I think he works for Ripple.

But if he's right, this would be revolutionary in a way, since Bitcoin electricity wasting mining could be replaced by this system.

In any case, my question is: can Bitcoin mining be replaced by a Ripple sort of system? How would that work?

Luca Matteis

Posted 2014-01-24T11:01:14.773

Reputation: 4 784

1One problem would be that Bitcoin also uses mining to accomplish the initial distribution and generation of the currency. You could add a mining like feature to Ripple's consensus algorithm to do that, but that would kind of defeat the point of trying to avoid wasting electricity. – David Schwartz – 2014-01-24T12:36:09.860

i think that bitcoin mining costs make it more secure over the 51% attack – Riccardo Casatta – 2014-02-07T11:20:53.577

Answers

Both Bitcoin and Ripple are systems made of many components. One such component is a method to synchronize transactions and secure against double-spending; Bitcoin uses mining based on proof of work for that, while Ripple uses a consensus mechanism. Another component is the initial issuing of coins - Bitcoin uses mining for that as well, while Ripple uses central issuing. Of course, the key component of Ripple, which Bitcoin lacks, is a credit network with pathfinding.

You could build a system which is like Bitcoin in every way except that it uses consensus for synchronization rather than mining. It is likely that the total energy spent on generating new coins will be lower than the total energy spent on synchronizing transactions; so replacing that part with a mechanism that requires less energy is welcome. However, the consensus mechanism is not as proven as the mining mechanism, and is less decentralized thus less consistent with Bitcoin's overall vision.

Meni Rosenfeld

Posted 2014-01-24T11:01:14.773

Reputation: 18 542

1Nice answer. Could you explain, or provide a link to something explaining why consensus has to be more centralized than mining? It seems like Bitcoin mining has become quite centralized due to pools... Thanks – DJG – 2014-05-18T14:20:44.920

1@dg123: Ripple's consensus mechanism requires every node to define a UNL of nodes that it "trusts". So there's no objective truth determined computationally, rather it is relative to each node's trust. The need to have nodes which are trusted is what makes Ripple more centralized. Pools will not be a cause of centralization when Multi-PPS is implemented. – Meni Rosenfeld – 2014-05-18T19:16:13.687

Ripple is not a Bitcoin without mining, Ripple is more akin to the existing financial services system in that, all ripples are centrally created and tracked, much in the same way Fiat currency is. I would classify Ripple as more a medium of transfer. So to use an analogy if bitcoin is the 'Gold' on which we base a financial system a ripple is a proof of ownership contract. Much the same way the eGold was or even fiat currency before it fundamental value was no longer tracked by gold reserves.

hafnero

Posted 2014-01-24T11:01:14.773

Reputation: 841

1OP didn't suggest that Ripple is Bitcoin without mining. Ripples are centrally created but are not centrally tracked, Ripple uses a consensus mechanism for that. The question was whether this mechanism can be used as a component in a "Bitcoin without mining", which is a valid question. – Meni Rosenfeld – 2014-03-09T19:03:27.980