Cuckoo Cycle is a new proof of work system with the following features
1) proofs take the form of a length 42 cycle in the Cuckoo graph, so that verification only requires computing 42 hashes.
2) the graph size (number of nodes) can scale from 1x2^10 to 7x2^29 with 4 bytes needed per node, so memory use scales from 4KB to 14GB
3) running time is roughly linear in memory, at under 1s/4MB
4) there is no time-memory trade-off, and memory access patterns are the worst possible, making the algorithm constrained by memory latency
5) it has a natural notion of difficulty, namely the number of edges in the graph; above about 60% of size, a 42-cycle is almost guaranteed, but below 50% the probability starts to fall sharply
the program could be rewritten not to use bit 31 as a flag, and then you could use as many as 2^32-1 nodes, but that's not neatly expressible as MULT*2^SHIFT with few digits.
http://webcache.googleusercontent.com/search?q=cache:0RAOB-M...
I don't see anything regarding compute rewards here. It's all about the mining PoW. If all nodes are validating the Turing-complete scripts, and only the miners are getting paid, how does that work? What am I missing?