Mine cryptocurrency by dancing – is it as crazy as it sounds?
Mining crypto with dance is crazy, but bitcoin is several leagues crazier and working just fine.
World of Warcraft gold was one of the world's most in-demand virtual currencies before bitcoin even existed. It imposed artificial scarcity through a proof-of-work system that required system users to perform certain time- and energy-intensive actions via a fantasy-themed user interface before new coins could be minted.
In other words, you got gold by playing the game. That it required time and energy to obtain, and was an in-demand item, gave it "weight" by imbuing it with artificial scarcity and value.
In 2007, when bitcoin was probably just a twinkle in Satoshi's eye, the digital goods market was estimated to be worth about $1.8 billion, employing 100,000 people in China alone, and World of Warcraft gold was one of the most valuable digital currencies around at the time. By 2011, prisoners in labour camps were accruing more monetary value for their bosses by playing World of Warcraft than they were with manual labour.
The system worked, with the coin's value essentially being assured through a manual proof-of-work system. It wasn't sustainable though. The digital currency's value drove farming, which in turn drove inflation and collapsed prices.
Bitcoin is similar. It uses a proof-of-work system that requires miners to invest computing power to extract value. Its growing value has similarly caused an influx of entities determined to extract as much value as possible from the system. Thankfully, bitcoin can't be mined with slave labour the way video game money can. Also thankfully, it controls inflation by reducing the rewards rather than dispensing more coins. This prevents it from getting prematurely mined out to its limit of 21 million.
Proof of dance
A pair of MIT students, Agnes Cameron and Kalli Retzepi, created a Dance Dance Revolution (DDR) mat that mines cryptocurrency on a private Ethereum blockchain, Sky News reports. They created the mat for a party, during which it strung together about 10,000 blocks through the power of dance.
It was intended as a party gimmick, but it also raises some interesting questions about the concept of creating value, especially in a world where robots have taken all the jobs.
"We've been talking a lot in the group about possible futures that this project could have," said Cameron. "One of the ideas that has been passed around is that when robots have taken all the jobs, what are we going to do all day? How will we create value? Maybe it's through dancing.
"This sounds silly, but it's actually not such a wild proposition. All currency systems require some form of scarcity to operate, and with digital currencies that scarcity needs to be imposed artificially: otherwise someone could just declare they owned billions of bitcoin. In mainstream cryptocurrencies that gets tied to an absolute number of total coins, but by tying it to a finite resource – in this case, how much dancing someone can do – you can also propose scarcity limits."
However, in the case of this particular system, the creators note that dancing is a bit superfluous and someone could still just write a script to play the game for them. A functional system would need to account for that with sensors to check for weight on the pads or something similar.
Proof of work it, work it
In some ways, it's even less outrageous than it sounds. The current world economy is already run on a proof-of-wealth system of sorts, where wealth creates more wealth through something called "investing." This is the backdrop against which robots will start taking jobs.
In broad strokes, a hypothetical proof-of-dance system highlights two characteristics that might be important for this perhaps-not-so-hypothetical future.
- People can do it without necessarily having any skills or experience. It's a largely egalitarian system where the returns directly depend on the amount of energy an individual puts into it. More money means more work. This might allow someone to earn more wealth on top of a universal basic income to pay for luxuries or education to help break into work that pays better than dancing.
- It obviously can't be automated because hot dance moves come from the heart, not the body. This means it can't be profitably dominated by whoever has the most capital.
In practice, of course, proof of dance doesn't tick the requisite boxes. It might lock out people with physical impairments and would inevitably get taken over by slaves, of either the human or robot variety, the moment it was profitable to do so. But in broad strokes, those two criteria might be important to the future.
One of the main criticisms of such a system might be that "dancing," whatever form it might take, doesn't necessarily create any value and therefore can't be rewarded. This is probably a purely mental obstacle though. As long as the action requires some type of effort, it can have scarcity and therefore value.
Just look at World of Warcraft gold. It could only be spent on one very specific form of entertainment but creating it was still a more monetarily valuable use of human hours than anything else.
And just look at bitcoin and the vast energy-guzzling apparatus that powers it. All that energy consumption doesn't actually do anything. Only a tiny fraction of that is actually needed to process transactions. All the rest of it simply sits there as a kind of weight to imbue the network with the artificial scarcity and artificial value. By consuming so many resources, bitcoin arguably provides less than zero value.
At least proof of dance would get people in shape – especially the human slave labour inevitably tasked to work on it.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
- Ethereum price: Upward surge noted but fears of near-term volatility continue to persist
- Can Anchorage bring crypto staking and DeFi to banks?
- Bitcoin price crashed after touching US$42,000 – and that’s okay
- Bitcoin price hits US$40,000 again before meeting resistance
- Bitcoin price: Strong gains may put new all-time highs in reach