The X Prize Foundation has announced its intention to offer a multimillion dollar prize for nanotechnology.

The X Prize Foundation came to fame in 1996 by offering a $10 million prize to the first team to make back-to-back flights of a privately owned, manned spacecraft to the edge of space and back. That award was captured in 2004 by SpaceShipOne (pictured).

With its original space travel award and the addition of upcoming awards in nanotechnology, automobile technology, genome research and education, the X Prize Foundation has demonstrated a knack for defining milestones that represent a real breakthrough in an important technology and offering very significant incentives to achieve them.

The new prize for genome research is the furthest along in its development. Chief executive and X Prize Foundation founder, Peter Diamandis, said in a Wall Street Journal article this week that the foundation will offer between $5 million and $20 million to the first team that completely decodes the DNA of 100 or more people in a matter of weeks.

The foundation will release details of the nanotechnology award when its criteria have been determined. It will be interesting to see what sort of milestone they believe reflects a real breakthrough in nanotech. Almost as interesting as seeing who wins it and how.

What future accomplishment do you think deserves the X Prize for nanotechnology?