Bitcoin is an interesting new experiment in electronic currency. A user can send these and receive Bitcoin electronically and anonymously. Its easy to include in an email for example. Furthermore, there is no central organization that has control over it. The entire system runs p2p. The source code and all the transaction data are fully transparent.
The internet is full of people talking about this thing right now. Here is a Slate article.
There are a number of challenges to creating such a system and it’s creator is undeniably clever. From the users point of view its extremely easy to send someone a tiny or large sum. Under the hood is a well designed mechanism involving cryptography, p2p technology, distributed database and even an incentive system to both distribute initial Bitcoins and keep the network humming along.
What’s most impressive is that it’s working. People are buying, selling, donating this stuff. Some libertian hippie is driving across the country using only Bitcoin. Check out the Bitcoin Classifieds.
As if the project wasn’t fascinating enough the author, Satoshi Nakamoto seems to have materialized to release the project then has vanished. No interviews, no picture, no credit. Nobody seems to know who or where he is. The execution of the project is very impressive. This isn’t an open source project that grew from community involvement or a clone of an existing design. It wasn’t based upon a research paper. It’s a complex structure with many move parts that had to be solid at time of release. In order for the currency to have value people need to have confidence in the system. It has to be seen to outlast time. A currency that breaks down after a certain number of transactions or has unaddressed vulnerabilities won’t hold up.
After such a system is released you can’t tweak the rules. After all, there is no central organization to approve such rules. It a program that has to run on society without rule changes or adjustments to the central algorithm. The fact that Bitcoin has accomplished this is quite a feat. The fact that the author has vanished further strengthens the concept. People will always look for the central figure. Bitcoin requires that there isn’t.
The mystery of the author and development of this project is what intrigues me the most about Bitcoin. It adds to the most interesting technical project I’ve seen in a long time.