With Bitcoin on the rise recently (currently priced at $900+), I thought I’d share the link to this article – Bitcoin – Money Decentralization – which provides some insight into how Bitcoin works and some core principles behind it.
The article is written more from the Computer Science perspective rather than an economic/financial one, some of the economic details might be oversimplified.
The two main aspects that make Bitcoin different from a modern monetary systems, like US Dollar or Euro, are the following:
- Decentralization: There is no central entity that prints (mints) money, but rather the money is being mint by the crowd. This makes Bitcoin a decentralized system.
- Anonymity: People who use Bitcoin hope that their identity would not be revealed, in contrast to the usual way we all buy commodity over the internet using our credit card, we have to supply our personal details to be verified against the bank who treats our account.
Gitchain – decentralized, peer-to-peer Git repositories
Gitchain is an application of ideas behind Bitcoin, Namecoin and DHT applied to Git hosting. Once you install it, it acts as a local proxy to the entire Gitchain P2P network.
TechChrunch has a nice post covering the developments and ideas in the area of digital money. Even though most of the discussed is far from being practical today, the ideas and the progress are still fascinating.
Virtual currencies are in the news again with all the discussion aroundBitcoins, which is limited in supply and can be exchanged anonymously. Our own long experience with another digital currency, Ven, has made us think about the logical conclusion of these activities, and what it means for money at large. And what it means is the end of money as we know it.
For today I have a few Bittorrent links. We all have to do our peer-2-peering once in a while, don’t we?
These were shared bookmarks for del.icio.us user tvset on 2005-08-28.