Microsoft Research is working on an alternative to bitcoin

Researchers working at Microsoft’s research department have developed the Permacoin. Users cannot earn this virtual currency by mining, but by locally backing up data from large online archives.

In order to ‘earn’ bitcoins, users must mine using as much computing power as possible. However, the mining process does not yield anything besides possible bitcoins. Microsoft Research, which collaborated with the University of Maryland, thinks it can offer a good alternative to crypto with its concept for Permacoin. As the name implies, Microsoft wants to reward users by storing data.

Permacoins can be earned by storing data from online archives locally, according to research by Microsoft Research. This data must have a public use, such as library data files. Logically, the used storage space plays an important role in obtaining Permacoins.

The Permacoin software should not only contain algorithms to protect stored data against attacks, but also guarantee the integrity of the data. A mechanism has also been developed to check that the data is stored locally and not online on, for example, a cloud service. According to calculations, more than 200TB of data can be stored with the current computing and storage capacity used for the bitcoin network.