Gridcoin and Golem both aim to offer distributed computing functionality with a cryptocurrency angle. At the most basic, the differences between Gridcoin and Golem are:
- Gridcoin provides an always-on supercomputing cluster that incentivizes participation intrinsically as part of its blockchain security.
- Golem is attempting to create a “prosumer market” for spare computing power. I.e., “AirBnB for computing”.
While Golem’s extreme immaturity (currently, a single-purpose, CPU-only, rendering-only prototype with no general SDK or functional marketplace) means that some of these observations may eventually prove inaccurate, as it stands today, the Golem approach is flawed on a number of fronts:
1) There’s little evidence that demand for any such “prosumer” market exists on the buy side; said market would require a large volume of tasks bigger than a single computer can handle, but too small to justify either a) renting a cluster directly or b) investing development effort to create a BOINC project to take advantage of a huge existing free cluster. While there may be a market on the sell side, sellers may well find themselves unable to compete or participate at prices buyers are willing to pay, or that their computing power is too low to attract buyers at all.
Gridcoin ensures that there is always incentive for both “buyers” and “sellers” by simply processing all projects and distributing basic rewards to all participants.
2) Since Golem is an auction rather than a platform-as-a-service, it will be nearly impossible for buyers to determine costs and capacities ahead of time. Buyers must basically establish contracts for each individual task on a just-in-time basis rather than buying general capacity. In addition, sellers may well be forced by inefficiencies of scale or electricity costs to price their services too high for would-be buyers to consider over existing services.
Gridcoin won’t necessarily enable superior capacity planning, but it ensures a basic, fixed amount of participation in every project on the network at no cost to the “buyer”, which Golem cannot do.
3) By focusing on auctioning, Golem is basically providing bits-and-pieces computing rather than a true cluster. Tasks aren’t equally attractive to all participants in the network and there’s no assurance that any particular portion of the network will be willing to participate in Golem projects at whatever price is being offered by buyers (or that buyers will be able to afford to buy any particular amount of participation).
See above.
4) Many Golem fans assume that existing cloud computing providers will adopt Golem as a middleman for excess capacity. However, there is no evidence that such excess capacity exists on a general level. Businesses have no incentive to provision more capacity than they believe they can sell; overselling is more typical. Such arguments also assume it will be less profitable for these businesses to sell or otherwise utilize their own capacity directly, another dangerous assumption. (See here for a discussion of the “excess capacity” myth.) While anecdotes abound (“my render farm would love to sell its excess capacity”), there are existing services that already enable this (for example, Bitwrk) and their adoption is weak.
Not really relevant to Gridcoin, as its success needs or makes no such assumptions.
5) For buyers with strong security needs or stringent deadline and budget requirements, anonymous sellers offer them no recourse in case of theft or failure to deliver, which may be unacceptable given the need to control costs or have legal recourse in the case of IP violations. In addition, many parties (both buyers and sellers) may be legally obligated to avoid contracting with particular regions, companies, or individuals (e.g., OFAC’s SDN list) and Golem’s blind architecture may expose them to unacceptable legal risks.
While all distributed computing projects face difficult challenges regarding security of IP, Gridcoin at least guarantees a base amount of project participation, which Golem cannot do. Gridcoin also does not contract with, buy, or sell anything to any party.
6) There is little motivation for anyone to participate in Golem who isn’t either a speculator or actively trying to sell capacity (with the electricity and wear-and-tear costs that implies). Golem has a fixed supply of tokens that have already been distributed and no further tokens will be created, nor is there a staking mechanism (Golem is not a blockchain).
Gridcoin retains full staking coin functionality as part of its proof-of-research security mechanism, meaning anybody can participate as an investor and earn a small amount of interest without the added overhead of participating in task crunching if they aren’t interested or it isn’t cost-effective to do so.
7) Golem will require buyers to invest in developers able to use a (yet-to-be-developed, much less released) custom Golem SDK (rather than an existing, battle-tested open platform) for creating tasks that can be distributed on the Golem network. In addition, the complexity of developing Golem-compatible tasks is unknown, since Golem is far from providing a general-purpose computing platform and any supposed ease-of-use advantage is completely speculative at this point.
Gridcoin is based on BOINC. BOINC is a fully-open platform with years of development, bug fixes, and optimizations already invested. The process is well-documented and there is a huge ecosystem already in place. In addition, the development investment offers guaranteed participation.
8) From a cryptoenthusiast perspective, Golem does not have its own blockchain (it is an Ethereum token) and cannot add features or fix issues on the blockchain. If at some point there are problems or insufficiencies in Ethereum, Golem cannot resolve them without implementing its own blockchain or moving to another codebase, both of which are huge efforts.
Gridcoin has its own blockchain, is already a staking coin (which ETH looks to be moving toward), and can implement smart contracts at a later date (already a roadmap item) to duplicate key ETH functionality while providing additional unique features such as its neural network-based consensus mechanism and on-chain voting.
9) As a special-purpose marketplace application, GNT will never be able to incentivize participation apart from fees paid by businesses — i.e., Golem can never duplicate Gridcoin. However, Gridcoin can easily create external services layered on top of its base functionality (e.g., a marketplace of BOINC projects to vetted participants with escrow services ensuring payment), thus Gridcoin can eventually duplicate Golem’s auction-based offering.
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Gridcoin initially positioned itself as a science coin to attract the participation of the hundreds of thousands of existing BOINC users across dozens of BOINC projects. As Gridcoin has grown in value, arguably the appeal has broadened well beyond this original audience and Gridcoin now draws new participants into the BOINC ecosystem on its own merits. While Gridcoin still offers value to and could benefit from the participation of remaining BOINC users, Gridcoin should step forward and openly embrace business use (BOINC itself does so now: “Companies – use BOINC for desktop grid computing”) in its marketing. With Gridcoin, businesses are assured of at least a basic amount of participation in their projects, and can easily incentivize increased participation by purchasing and distributing Gridcoin to project participants (and this will naturally raise the value of Gridcoin, attract more participants, and increase the overall capacity of the Gridcoin supercomputer.)
Finally, since Gridcoin is not attempting to rebuild a task distribution and validation system from nothing, it benefits from the entire collective skills of the BOINC ecosystem, including the core dozens of contributors and the 30,000+ code commits that help ensure that BOINC functions securely and efficiently cross-platform. Golem is attempting to redo all of this work from scratch with a handful of enthusiasts, only to end up with something that is less than a supercomputer and more of a grab bag, and can never be more than it’s setting out to be.
Golem is just more investor-friendly. I’ve yet to find any information on the devs working on it, and it seems to be restricted to scientific research.
The cryptocurrency utilises a decentralised development model, same as how bitcoin operated in its infancy.
Many projects are scientific in their nature, however not only can you distribute any kind of distributed computation task though BOINC, there is no centralized authority in charge of projects.
If you have a serious amount of data needing crunched you’re better off with creating your own BOINC project.
Throwing a paywall on a boinc project with a php plugin would be simple; take a fee and split the rest proportionally to contributed computation & you’ve not only recreated golems business model, you’ve created a cloud computation service of your own desire with a small budget.
Thanks for the article. However what is the actual incentive to hold Gridcoin? The incentive to hold Golem is that you need it in order to run jobs on the network. However what is the use of Gridcoin? I know that you can use it to vote on which science projects are prioritised, but is that all? I suppose it could be used just like Bitcoin, but Bitcoin is already huge and the only incentive for everyone to move from the Bitcoin infrastructure to the Gridcoin infrastructure would be for ethics… And I doubt people care enough about that when Bitcoin is already so well established.
I hope this made sense, looking forward to hearing your thoughts
Gridcoin’s a staking coin, so by holding it, you can earn more of it — and it’s actually necessary (as a staking coin) to have at least some GRC in order to receive rewards for crunching. You can also use it for voting, as you said. There are some merchants accepting it, and it’s on various payment platforms as an option as well.
That said, I suspect the real question is “what gives it value,” which is really a sort of Economics 101 question. If people desire it, it has value, and the specific reasons for which they desire it don’t really matter very much — this is true for pretty much all cryptocurrencies. While a token like Golem theoretically has a use as a medium of exchange in a particular domain, the problem is that with an auction model, there is no way to judge in advance exactly how much you’ll receive in exchange, so it can never be trusted to have any particular value on a utility basis and only holds value on pure speculation. I’d argue that even if the problems I pointed out above weren’t already enough, this will harm the desire to hold it if you’re not actually using it, and will harm the desire to buy it since you don’t know what you’ll get in exchange.
Okay perhaps I have truly misunderstood. I thought scientists just submitted projects to Gridcoin and some of them are voted in for use on the supercomputer… whereas Golem is available for anyone to use?
BOINC is a platform (a set of tools) for creating a distributed computing project in a standardized way. Anybody (including businesses) can create a BOINC project and submit it for inclusion on the Gridcoin whitelist. The whitelist is primarily in place to deal with hacked / abusive projects which have no work units, give away credits, run malware, or otherwise behave in some way that essentially steals a share of the GRC rewards. That said, ultimately the whitelist is not a hard requirement and there are various ways it could be removed, though I’m not certain that would be a good thing.
Note that Golem expects every user to maintain his or her own whitelist, so the only difference here is the community vs. individual aspect. There are arguably some advantages to the Gridcoin approach, especially since not every user will have the time or sophistication to deal with tasks that run malicious code such as botnets or tasks that attempt to jailbreak and attack the host systems.
Very good article and have hit every point why GRC is far more superior than GNT.