Mining as Inference: How Nockchain Achieves Dual Benefits?

Mining with computational power while running AI, earning both block rewards and inference income.

Written by: Luke Leasure Nick Carpinito

Compiled by: AididiaoJP, Foresight News

Macro Overview: Mild CPI, Stock Market Continues to Outperform Crypto

On Wednesday, the CPI rose 0.1% month-on-month, in line with market expectations, a significant rebound from last month's -0.4%. Housing contributed to about two-thirds of the increase, while energy continued to decline by 1.5%, and gasoline dropped by 2.9%. This data is unlikely to change the Federal Reserve's interest rate path.

On the same day, the stock market outperformed cryptocurrencies: the Nasdaq rose by 0.56%, the S&P 500 by 0.23%, and crypto-related stocks increased by 2.19%. BTC fell by 0.25%, with most crypto indices performing even weaker—stocks continue to outperform tokens, a persistent theme recently.

ETF fund flows showed slight changes. A period of mild net inflows was interrupted by a single-day outflow, corresponding with BTC's daily weakness. However, since early July, net inflows have turned positive, contrasting sharply with the significant outflows in May and June. If this trend continues, further accumulation in ETFs is expected to support BTC.

Computational Power: Paying Twice

Making proof of work do something useful is not a new idea. Bitcoin miners burn computational power solely for hashing, with no other purpose; AI inference service providers sell GPU time to clients but do not mine.

Tomorrow, at block height 126000, Nockchain's Logos upgrade will go live, eliminating the boundary between the two.

Note: Nockchain is a Layer 1 public chain that will be fairly launched in May 2025 (no pre-mining, no VC allocation, no team reserves). Its core innovation is zero-knowledge proof of work (ZKPoW): miners no longer burn computational power for useless hashes like Bitcoin but generate zero-knowledge proofs (STARK proofs based on NockVM). Mining itself produces "useful work," ensuring network security while providing computational power for the verifiable computing market.

Dual Puzzle Mining: 30% to AI, 70% to ZK

Logos adds a second mining puzzle—integer matrix multiplication, which is the core operation of AI inference, with an independent difficulty target.

Once activated, network block production will allocate 30% to the AI puzzle and 70% to ZK-PoW. Miners perform matrix multiplication, and if the result meets the target, they win the block. If this computation happens to run for a paying inference client, the same computational power simultaneously becomes a lottery ticket for block rewards.

Nockchain's founders describe this mechanism as a security budget that will grow with the expansion of the AI economy: as inference demand rises, more GPUs will point to this chain, increasing the cost of attacks.

However, this logic is based on demand that has not yet been realized on a large scale. Nockchain needs actual paying inference clients for the flywheel to start turning.

To this end, the founders established National Compute, a company dedicated to providing the first batch of clients. This company drafted the Logos proposal and completed an internal audit—in other words, the protocol's major upgrade and its first anchor client come from the same author.

Launch Timeline: Delayed Three Times

This launch coincides with Zorp (Nockchain's research company) shutting down weeks ago, transferring its trademark and code repository to Nock Community Co. (a non-stock entity managing 20% of the protocol fund).

Logos is the first upgrade under the new governance structure: it has undergone public testnets, third-party cryptographic audits, a bug bounty of up to 1 million $NOCK, and an announced activation height. The dual puzzle code ran on the public testnet for 20 days and was only merged into the mainnet this week.

Two things to be cautious about:

First, the activation height has been adjusted multiple times: initially set at 114300 at the end of July, changed to 122000 after the testnet, and finally set at 126000 on Friday. Any repeatedly delayed launch carries the same uncertainty.

Second, the security argument is based on a puzzle with no historical record. Nockchain fixed a reuse trajectory mining vulnerability at height 119400 through the Zoe upgrade in early August—reminding us that this proof mechanism is still in its early stages. Although that fix did not alter the ZK scheme and only involved block reward capture, the AI puzzle itself also raises questions of soundness, which is precisely why audits and bounties exist.

Market Pricing: $22 Million Valuation, Waiting for a Market

$NOCK is currently trading at about $0.009, with a market capitalization of approximately $22 million and a fully diluted valuation of about $41 million, far less than the attention it received during its fair launch last spring.

For holders, the details of Friday's mechanism are less important than one question: Can National Compute bring enough paying inference traffic to the miner cluster to turn the narrative of "security + revenue" into actual cash flow?

Nockchain has already completed the more challenging engineering tasks. What it truly needs is a market that has yet to be built.