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I understand the bitcoin blockchain motivates mining because there's a bitcoin reward for the miner who solves the pending block.

What if a blockchain doesn't store currency data but some sort of ownership data that cannot be represented by currency, e.g. tweets or land and stock ownership.

It would probably be too much to reward a miner with the ownership of land. And even if it were appropriate, there could also be other cases in which the blockchain doesn't store data regarding any kind of asset ownership.

Is it possible to offer reward that is not coupled to the data of the system?

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  • So, your question is "How could one incentivize mining on a non-currency blockchain?"
    – Murch ♦
    Jan 14, 2016 at 8:29
  • @Murch yes, please edit my question if you feel that was not clear.
    – Matias Faure
    Jan 14, 2016 at 16:18

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There are several blockchains that already do this. Colored Coins (on bitcoin blockchain), Counterpary (on bitcoin blockchain), NXT, BitShares, Ethereum and others allow to represent any asset you wish like land, cars, consultancy hours, etc., using digital tokens (e.g. the "data" of the system as you called it) which is irrespective/decoupled of the reward they get.

See Colored Coins for how you can use metadata in a bitcoin transaction to achieve that result. It is especially easy to implement using Counterparty.

So, you can already store the kind of data you want in parallel to a digital token that rewards the miners.

If you meant, only having the asset in the blockchain and no reward then the answer is no, you cannot: you always need something in digital form that can be securely shared to the contributors**.

Hope this helped.

**For an internal reward, you have to give something of value to the contributors within the system. Say, that you don't want to give money/currency but instead some service. In order to keep a proper count of the rewards for each contributor you would need a digital way of representing the reward, ie. by using a digital token. To securely keep track of the rewards you need to also put them in an immutable structure, ie. the blockchain.

Thus, whether you want to give money or chickens or some kind of service to the contributors you have to digitally represent it (tokens) and secure it (blockchain). The token represents the reward and it does not need to be money. However, it is very practical to think about it as money since this is the unit of exchange that most of us are used to.

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  • I've also learned the reward has to be easily quantifiable so it can be regulated to match the complexity of the hash.
    – Matias Faure
    Jan 19, 2016 at 11:50
  • I am not sure what you mean with 'quantifiable' for the reward. In blockchain implementations that I know of, the reward is fixed per successful proof of work (e.g. finding a hash for the next block gives a fixed number of the tokens used to reward).
    – karask
    Jan 19, 2016 at 20:14
  • The mistake of my previous comment was pointing out that the complexity of a block hash (difficulty) increases depending on the amount of miners, the reward has to be quantifiable so it can be tuned just so. See: bitcoin.cex.io/what-is-bitcoin-difficulty
    – Matias Faure
    Jan 19, 2016 at 21:54
  • But when it comes to chickens or some kind of service, how can you guarantee it will be delivered?
    – Henrique Barcelos
    Jan 20, 2016 at 16:45
  • @HenriqueBarcelos you cannot guarantee it. You will have a digital token that represents the service (or chicken) and you depend on the honesty and reputation of the person (who issued the token) to deliver as promised. If that person doesn't deliver his reputation declines and with it the value of his token. Some examples of these token were issued through the LetsTalkBitcoin platform (which uses Counterparty behind the scenes): e.g. Adam sells one hour consulting tokens here.
    – karask
    Jan 20, 2016 at 18:32
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Currently the Bitcoin blockchain uses coinbase transactions to reward miners when a block is found. There is no reason this functionality can't be changed. It is also worth nothing that there are other ways to secure blockchains besides Proof of work, which is what the Bitcoin blockchain implements to come to consensus on who owns which assets. If someone were to implement a different consensus model in their own blockchain any kind of reward that the developer could conceive of could be implemented. Consult with several software engineers if you have an idea that you are unsure of how you could implement such a system.

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    I think that the asker was aware how the Bitcoin mining reward works but was actually requesting input on how to incentivize mining in a non-currency blockchain.
    – Murch ♦
    Jan 15, 2016 at 8:19

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