General idea

On a regular Proof of Work (PoW) blockchain like Bitcoin, miners perform lots of computations to ensure transactions are valid. This prevents users from generating malicious transactions. These computations are purely abstract mathematical challenges that have no real utility in the real world apart from securing the blockchain. PoUW intends to replace them with useful computations.

Application domains

This computing power could be used to perform numerous computations, such as training artificial intelligence models and computing new molecules for health purposes. Any computationally expensive industry could benefit from PoUW by borrowing computational power from the miners.

There are two main reasons this technology is surely going to be adopted once matured:

•  It lowers the cost of computations  
• It makes blockchains greener

Let's break down why.

Currently, when a lab wants to perform intensive computations (e.g., for ChatGPT), they have two choices: either they rent servers from a tech giant (Amazon Web Services, Google Cloud, Microsoft Azure), or they build their own supercomputer. Both options are really expensive.

Meanwhile, existing blockchains have access to a gigantic pool of computing resources for the purpose of operating a currency. These pools perform computations of hash functions to secure the network. Replacing those computations with useful ones doesn't change much. All parties win:

• The company saves money as it is usually way cheaper (we are speaking of a 2-10x factor) to use blockchain technologies than cloud providers. 
• Miners and traders have incentives to operate on this particular blockchain, as the currency price is backed by the company that requires this computing power and has to purchase coins.

• The overall energy consumption decreases: the energy consumed by the scientific computations is absorbed by the blockchain needs for Proof of Work.
• This is highly scalable, and you don't have to trust Google or Amazon not to steal your results.

Existing projects

The PoUW technology is a core component of a larger movement called DePIN (Decentralized Physical Infrastructure).

Numerous DePIN projects exist, and while they may employ methods other than PoUW, they are all striving to achieve more or less the same goal: enabling blockchains to function as a vast cloud provider from which users can borrow storage (see Proof of Storage), GPUs, CPUs, and more.

Some of these projects are more general-purpose, while others are designed for specific use cases. Here is an accurate snapshot of the state of the art as of December 2023.

Implementation challenges, in simple words

1 - Ensuring transaction validations

Why is PoUW still a niche ? At first glance, it seems very obvious. Why not use real computation for securing the network in the first place? Well, it’s tricky. Indeed, the mathematical puzzles that miners solve have to respect certain properties to ensure network security.

With bitcoin, miners can join/leave the mining group at any time. If too many leave, computing power drops. Therefore, if the puzzle they have to solve remains as hard as before, they might take more time to complete it. Resulting in a significant time increase to validate a block. Slowing down the whole process of sending money to another wallet.

To address this issue, Bitcoin just lowers the difficulty of the puzzle. This is quite easy because, indeed, this puzzle is made to be adjustable. Therefore, when more miners join, the problem becomes harder, and vice-versa. This ensures that a block is validated roughly every 10 minutes and that every transaction is processed quickly.

Adjusting this difficulty for real-life problems can be trickier. A blockchain attempting to discover a new medicine could lower the lower bound of effectiveness for the molecule that miners are trying to find. Consequently, it becomes easier, and the number of validated blocks remains the same. Obviously, this results in side effects. Would you really trust a drug that might have been computed while the network has reduced the threshold for effectiveness?

2 - Block verification

On Bitcoin, once miners have solved a puzzle, they publish it on the network to add the block to the blockchain. The puzzle is designed in such a way that it is easy to verify that the solution is correct. This is a critical feature because, otherwise, any miner could pretend they found a solution first and claim the reward, and no one would be able to verify if they aren't faking it.

Now, let's delve into a PoUW blockchain scenario. Suppose all miners are focused on training an AI model. Once one of them discovers a promising model, they announce it to the rest of the network. Other nodes then need to verify that the model matches the expected performance, a process that involves using certain metrics. The second issue arises in running these metrics – to do so, nodes need to download the model, which can be several gigabytes. This results in a significant time consumption and an overall slowdown of the entire network.

This illustrate that PoUW cannot be suited for every type of computation.

3 - Parallelizability

In Bitcoin, the puzzle can be solved independently by a different computer. They don’t need to interact with each other. This is not necessarily the case for all computations. Therefore, almost all PoUW blockchains that have been proposed so far are limited to specific use cases. For instance, transformers, the technology behind ChatGPT, has some subcomponents that aren’t parallelizable.

Takeways

• PoUW leverages the massive computational power of blockchain miners for beneficial purposes, such as AI model training or medical research, making these operations more cost-effective and environmentally friendly.

• Cost and Environmental Benefits: By replacing abstract mathematical challenges with useful computations, PoUW offers a more economical option compared to traditional cloud services, potentially reducing costs by 2-10 times. It also promises to make blockchains greener by repurposing the energy used for PoW. 
• PoUW is part of the larger Decentralized Physical Infrastructure (DePIN) movement, aiming to turn blockchains into vast cloud providers, offering resources like storage and computing power for various applications.