It looks like the case you’re making in the “a prize” section is that prizes are more open to “outsiders” than grants which seems generally plausible to me. On the other hand, grants can actually fund the research itself while contestants for a prize need some source of funding. If it’s capital-intensive to mount a serious attempt at the prize, this creates a funding and vetting problem again (contestants will need money to bankroll their attempt).
This is a good point, that is often made. There are several aspects to this :
1. a Prize in this space is seen as a complementary instrument to direct funding, not replacing it.
2. Prizes are known to have leveraged money flowing into the field. The Ansari XPrize was 10 mln$, but inspired 100mln$ collective funding into the companies vying for the prize. Similarly we’d expect the existence of a Prize to galvanise momentum for exotic energy research.
3. The Prize design will select for relatively low-complexity solutions. E.g. it’s unlikely that Tri-Alpha, a 500mln$ fusion startup, will participate in this Prize. Instead, it is geared towards the smaller, much more accessible lab setups all the way down to individuals in their garage. This maximises the chances that *if* something is found, it is likely to start low on the cost-curve and hence be useful to society.
4. There is also a possibility that the winning technology is already (almost) out there, and really just needs a small nudge to meet the Prize criteria.