Microsoft Research has come together alongside the University of Maryland to work on an alternative to the cryptocurrency known as Bitcoin, and their efforts have been dubbed Permacoin. At this point in time, the virtual currency Bitcoin is “created” through the very act of solving mathematical puzzles, and this effort would consume large amounts of computing power and resources. The security models that are involved in the creation of Bitcoin happen to be a waste of computational power, which is why Microsoft Research and the University of Maryland intend to make use of such computational power in a better manner. In fact, the resources could be repurposed to “mine” Permacoin, a new form of digital currency.

Permacoins are said to be generated whenever users stash archival data that has been downloaded from a huge data pool. In order to mine Permacoins, one would not need to rely so much on computational power, but rather, to concentrate more on storage space instead. All data that has been stored will then be cross checked for availability and cohesion, where one’s contribution would then be rewarded by a Permacoin.

As for security measures, fret not – these will be in place to ensure that data is not offloaded to a cloud storage system, and neither should it be compromised via an attack on the Permacoin network. Will such an idea catch on? Only time will be able to tell.

Filed in General. Read more about bitcoin, Microsoft.

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