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The Best Science Writing Online 2012
Showcasing more than fifty of the most provocative, original, and significant online essays from 2011, The Best Science Writing Online 2012 will change the way...
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Cowrie shells, strips of leather, huge stone discs, decorated rectangles of paper. They all share something in common: at one time, people used them as currency. In 2009, when Bitcoin went live, ones and zeros were added to the list. And like each new format that preceded it, this digital currency has changed a few of money's core concepts, including who controls it and how and where it gets spent.
Nowadays Bitcoin adopters are providing some clues about the benefits of a decentralized, anonymous, digital currency. For instance, independent merchants use it to receive online payments directly from customers, WikiLeaks uses it to dodge financial barricades, and drug users use Bitcoin to shop anonymously on the Internet's black market. But not everything works smoothly. The system lacks a quick way for people to trade in their physical cash for Bitcoins. Foreign currency exchanges don't deal in Bitcoins, and finding someone to sell them in person remains a huge challenge. A few of the online exchanges that do exist have lost huge amounts of their customers' Bitcoins to hackers—a combined sum now worth over one million dollars—whereas the more stable ones require users to self-identify in a way that undermines the network's anonymity. And although the number of merchants using Bitcoin is growing, one still can't find very many places to spend them. At a conference this month in London, Bitcoin's core developers and many of those who are building applications to make it more user-friendly confronted the currency's setbacks of the past year and planned a course forward intended to elevate it from a niche technophile currency into one that competes with physical money on all levels.
"'It's a challenging project, but it's one that's going to change the world. So that's why we're all here,"' said Jeff Garzik, one of Bitcoin's lead developers.
How it works
Imagine sending money over the Internet as easily as sending an e-mail—any amount, any time, to anywhere in the world—just as though you're standing next to a person and handing them cash. This was never possible before Bitcoin.
The name, Bitcoin, is slightly misleading as there are no real coins involved. In fact, it's a publicly shared ledger that keeps track of transactions among different accounts. The task of updating the ledger falls to whichever computers (referred to as nodes) happen to be running the Bitcoin software at any given time—a role that is completely voluntary.
Anyone can participate at this level once they've downloaded the Bitcoin software and purchased "coins"—usually from an online exchange. The price they pay for them depends entirely on how the market values them from one day to the next. When Bitcoin users want to transfer their money to another account, they send an encrypted request to the network, identifying the involved parties by random strings of letters and numbers rather than by name. In order to verify the transaction and update the ledger, one of the nodes must come up with the solution to a difficult mathematical problem called a "'hash function,"' which takes the raw data from the transaction request and reduces it into a new string of data with a shorter, fixed length. A computer can only settle on the solution by trial and error, making multiple random guesses until it works. Once completed, this work is prohibitively difficult to reproduce and, in effect, time stamps the transactions as they come in so that no one can work backward on the chain. The first node to solve the puzzle broadcasts its solution to all of the other nodes, which then agree on the new version of the ledger. In this way, control over the ledger is spread over the entire Bitcoin network.
To the network, all of this looks like a long chain of transactions, reassigning ownership of an arbitrary unit called a Bitcoin. What users see depends on which applications they run to access the Bitcoin network. In general, the interface allows users to open any number of new anonymous accounts and then receive and send Bitcoins to and from any other account. A person who owns Bitcoins really just owns a cryptographic key used to access a specific account.
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34 Comments
Add CommentGreat article. Keep the bitcoin articles coming!
Reply | Report Abuse | Link to thisPaypal was designed to be a virtual currency. Bitcoin isn't a pyramid scheme just because there isn't as many ways to spend bitcoins at the moment doesn't mean there won't be at some point.
Reply | Report Abuse | Link to thisHow is it a pyramid scheme, if it's completely decentralized? It's less pyramidal than gold.
Reply | Report Abuse | Link to this"Bitcoin is a pyramid scheme"
Reply | Report Abuse | Link to thisNo. From the Bitcoin FAQ:
"A Ponzi scheme is a type of confidence scam where people who think they are earning unusually high returns on an investment are actually being paid from their own money and that of later investors. If investors try and withdraw their original investment from the Ponzi operator, the scheme collapses because no actual profits exist and there is not enough money to return the deposited amounts. Alternatively the Ponzi operator may simply leave and take the investors' money with them.
Similarly, a pyramid scheme is a type of confidence scam where people who "enroll" by paying a certain amount of money are made to believe they can make a large return on their investment by recruiting other people and receiving some portion of their enrollment fee. The scheme collapses because it requires exponential growth, so it quickly runs out of new people to enroll. The person starting the pyramid scam, who didn't have to pay an enrollment fee, makes money off of all their referrals; while the people at the bottom parts of the pyramid, who cannot find anyone new to refer, are left with no return.
Unlike either of these situations, BitCoin has no person "at the top" who collects money paid for bitcoins, or has to pay out when bitcoins are sold. Neither is there any kind of scheme in BitCoin to harvest money off of unsuspecting people in complicated ways. Instead, bitcoins are bought and sold on public exchanges amongst members of the general public who must all obey the same rules. If someone has told you that BitCoin is a moneymaking scheme, they have misconstrued it--bitcoins follow the same economic model as any other finite commodity and over time will tend to approach a price that reflects the value people ascribe to being able to use them. People who have made money off of buying and/or selling bitcoins are either lucky or have correctly predicted an increase in demand for them. People who earn bitcoins through "mining" are being paid for verifying and securing network transactions in a highly competitive market. In neither case is any kind of fraudulent activity or confidence scam happening."
I don't see PayPal as a virtual currency; neither does PayPal. The company describes itself as a "way to pay and get paid online." It has no currency of its own; it processes payments denominated in 25 existing currencies.
Reply | Report Abuse | Link to thisRegarding the current article and future discussions, I have a style suggestion: Use “Bitcoin” for the software and the system (as for other proper nouns), but “bitcoin(s)” for the currency (as we do for other currencies). As it happens, this is what the Bitcoin community itself does; for example, look at the usage on the main page for the Bitcoin wiki (at https://en.bitcoin.it/wiki/Main_Page).
Reply | Report Abuse | Link to thisBitcoin is a pyramid scheme because of the way coins are created (mined) not because of how they are used.
Reply | Report Abuse | Link to this"New users acquire the currency by running the software on their computers, and occasionally “striking it lucky” when they discover the number of the next Bitcoin to be issued.
Over time, the Bitcoin algorithm is designed to slow down the rate at which new Bitcoins are issued – which means early adopters were able to amass more coins more quickly than today’s user; and, if the network continues to grow, today’s user will amass more of the currency than someone who joins the network two years from now.
This gives all current users a vested interest in promoting the system to the next round of participants."
- The Register
"http://www.theregister.co.uk/2011/06/08/bitcoin_under_attack/"
See Also:
http://www.therefinedgeek.com.au/index.php/2011/05/20/bitcoin-pyramid-schemes-and-alternate-currencies/
bitbutter, that is a misrepresentation. The early adopters made the majority of the coins. They form the top of the pyramid. The exchange of coins is a separate issue that is used to distract people from the underlying reason for the existence of bitcoin which is to drive money up the pyramid to the coin miners. Perhaps down the road when there is no longer any money in mining coins bitcoin will become purely an exchange but not now and that isn't why it was created.
Reply | Report Abuse | Link to this"People who earn bitcoins through "mining" are being paid for verifying and securing network transactions in a highly competitive market." is also a misrepresentation. The fact is the return on investment declines as more coins are created. Creators are not paid for verifying and securing because if they were their income would increase as the cost of those tasks increases. The fact is people are paid for being early adopters and they make their money of the people entering the market after them. That is a pyramid scheme.
Since when is centralization the only criteria of a pyramid scheme?
Reply | Report Abuse | Link to this"Bitcoin isn't a pyramid scheme just because there isn't as many ways to spend bitcoins at the moment doesn't mean there won't be at some point."
Reply | Report Abuse | Link to thisWhat does that have to do with bitcoin being a pyramid scheme?
@bitbutter,
Reply | Report Abuse | Link to this"Bitcoin is a pyramid scheme"
No. From the Bitcoin FAQ:
Well, as long as bitcoin says they are not a pyramid scheme then it must be true. LOL
Reducing the rate of mined coins over time is the only way to end up with a finite number of units which is what the market has demanded. You or anyone is free to make a tiny change to the code (you won't be running "Bitcoin" anymore and Bitcoin nodes will not interact with you) but everyone who likes the change (say to constant rate generation) can join you.
Reply | Report Abuse | Link to thisHaving a decreasing reward over time is not a normal feature of a Ponzi scheme. Buying Microsoft earlier instead of later was much more profitable, not a ponzi scheme.
But regardless of that even, only the nominal amount is fixed and decreasing. In Summer 2010 ~7200 bitcons were being found each day worth ~$432. Today ~7200 bitcoins will be found worth a total of ~$82800. In December after the 210000 block is found the reward will halve. Assuming the current price that'll be ~3600 bitcoins worth ~$41400.
Final note, even the nominal amount paid to bitcoin miners is not completely fixed because voluntary transaction fees are also paid to miners. That is a very small total amount now, but it will likely grow compared to the block reward over time.
@RSchmidt
Reply | Report Abuse | Link to this"They form the top of the pyramid."
Sorry no. There is no pyramid--unless you also want to claim that gold or silver are 'pyramid schemes'.
To repeat: "Bitcoins follow the same economic model as any other finite commodity and over time will tend to approach a price that reflects the value people ascribe to being able to use them."
"the underlying reason for the existence of bitcoin which is to drive money up the pyramid to the coin miners."
No. There is no 'underlying reason', to claim otherwise is the pretence of knowledge. There are many reasons that contributors to the open source bitcoin project became involved. I'd wager that ranking highly among those reasons are: Appreciation of the importance of a currency that circumvents capricious law makers, and appreciation of the significance of anonymous global digital cash.
""People who earn bitcoins through "mining" are being paid for verifying and securing network transactions in a highly competitive market." is also a misrepresentation. The fact is the return on investment declines as more coins are created. "
Both these statements can be true, they are not mutually exclusive. So again it's not clear where you believe the misrepresentation is here.
"Creators are not paid for verifying and securing because if they were their income would increase as the cost of those tasks increases."
This is a non-sequitur. Don't know how to help you with that.
"The fact is people are paid for being early adopters and they make their money of the people entering the market after them. That is a pyramid scheme."
Nope. Here's wikipedia: "A pyramid scheme is a non-sustainable business model that involves *promising participants payment or services, primarily for enrolling other people into the scheme*"
Bitcoin refers to a software pattern and a unit of currency. On neither meaning is it sane to claim that bitcoin promises anything to anyone.
Since some people aren't fond of wikipedia, here's the online dictionary's definition:
"A fraudulent moneymaking scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them. Eventually the number of new recruits fails to sustain the payment structure, and the scheme collapses with most people losing the money they paid in."
Again, there's nothing fraudulent about the protocol or the currency unit, and in fact _it's nonsensical to claim otherwise_.
Your equivocation to the contrary: "nearly 3 million bitcoins were generated in 2009 — 13% of the total number of bitcoins allowed. The number of people sharing those 3 million bitcoins were relatively few" full text in article:
Reply | Report Abuse | Link to thishttp://www.hightechforum.org/bitcoins-a-crypto-geek-ponzi-scheme/
There are a number of ways the creators of this scam could have structured it to make it credible and fair. Instead they devised a system that would preferentially reward early adopters, such as themselves. The money they made is based on the money paid for "shares" in the scheme. If I invest in shares in Apple I can make money based on speculation of the share price, but fundamentally I make money based on the products Apple sells. But if I were to invest in a company only to find out that the money I made was based on new shareholders buying into the plan then that is a pyramid scheme.
Maybe bitcoin will become the defacto black market currency of the world. It already seems to be popular with drug dealers and tax-evaders. Like I said, there are many things the inventors could have done to make this legitimate; no surprise they went with the way that would make them wealthy instead.
"Reducing the rate of mined coins over time is the only way to end up with a finite number of units which is what the market has demanded." who says? Is that how world currencies are managed? It was a choice made to profit early adopters. If you really believe that this is the only way it could have been done then you are just the sort of gullible fool that gets fleeced by these types of scams. I guess no surprise there.
Reply | Report Abuse | Link to thisTo those who claim Bitcoin is a pyramid scheme, or that they know why it was created, I suggest trying it out. I have been using Bitcoin for over a year to transfer funds internationally. In my case it happens to be faster, more secure, and less costly than alternatives (bank exchange, then wire transfers; western union; paypal).
Reply | Report Abuse | Link to thisThere is nothing "pyramidal" about it - it simply works, and it is useful. It is a great technology.
"To those who think that some offer on the internet may be fraud or a scam, I suggest trying it out." Great advice! Would you make the same recommendation if someone thought something was poisonous or contaminated?
Reply | Report Abuse | Link to thisIf bitcoin was designed as a pyramid scheme to benefit the creator, they would have assigned themselves lots of the coins. In fact the creator only got the first 50 coins, in the "Genesis block". Thereafter coins are awarded for verifying the account book. This is a necessary function, and it is reasonable to reward the people who do the work.
Reply | Report Abuse | Link to thisI would ask those who object to the current method how else do you verify a distributed account book? How else do you prevent inflation if not by limiting currency issuance by some method?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
Reply | Report Abuse | Link to thisAll adopters benefit from the usefulness of a reliable and widely-accepted decentralized peer-to-peer currency.
Then Facebook shares are Piramyd scheme too - as it benefited early adopters.
Reply | Report Abuse | Link to thisYou dont really know the definition of piramyd scheme do you? Hint: It contains the nessesity of aquaring new members with capital. Neither Facebook nor bitcoin require constant stream of new users in order to survive - its needed only for growth
It's true. RSchmidt's reasoning, if it were sound, would also have to conclude that gold, silver, euros, dollars, and anything else that has been used as money are all 'pyramid schemes'.
Reply | Report Abuse | Link to thisLike bitcoin, all these mediums have in common that 'early' holders of the medium are incentivised to encourage new users to demand the currency. That's because this will increase the purchasing power of the money supply held by the early adopter. Meanwhile, the holders of all these monies enjoy the utility of the units being useful as a medium of exchange.
RSchmidt:
Reply | Report Abuse | Link to thisIt is obvious that you work at a service who´s profit is threatened by Bitcoin.
You claim Bitcoin is a pyramid, because some have more of it. In the case, all stock/products/currency is a pyramid scheme.
Than all stocks or Art or products and services in the world is a pyramid scheme. Because those who created them are those who could earn the most and the more people who wants the art/service/currency/product/stock the higher the price will go.
Its simple economics and does not make things a pyramid scheme. Which you suggest.
The difference is huge. In a pyramid scheme there has to be secondary, third levels fourth levels. In which the one who had the Bitcoin would earn a % everytime the Bitcoin was sold.
But that is not the case.
Any tiny transaction fee goes to anyone who includes the transaction.
Anyone can be a miner.
If you create a new free currency you can not make it so that it will go down in value.
If I sell a Bitcoin into FIAT money that with 100% certainity will go down in value over the years. I can no longer earn anything from any secondary sales of that Bitcoin. The Bitcoin is gone.
Thats what makes it a true currency.
Bitcoins goes up and down in price.
A couple of month ago you could had gotten lots of cheap coins at $2. But I guess you were thinking, Bitcoin will now crash so you did not get any coins.
Now in 2-3 years people might look back and say.
I should had gotten lots of cheap coins at $11.
Or they might not. Its simply impossible to know for 100%.
But claim its a pyramid scheme is just stupid. Especially since there are still half of all the coins left to be made and the last coin will be made in 100 years from now.
By making lots of coins early people are not afraid of spending them.
Like when someone bought a pizza for 10 000 Bitcoins. Do you think they would had done that if they knew that Bitcoins would become worth $11-32?
Hello Mister Smith,
Reply | Report Abuse | Link to thisif BTC is a pyramid scheme than so what? nobody forces you to invest into this "scheme". The scheme which you are using at the moment (Euro or Dollar)? is also a pyramid scheme which can be seen if one looks at inflation, defaluation and loosing of the gold standard.
Enjay having Fiat money and the people using BTC should enjoy their Bitcoins.
All the best
Bitcoin F.
I wouldn't call USD/EUR pyramid schemes, as this title is reserved for very specyfic type of scam. USD/EUR and other fiat curriences ARE scam, sophisticated one, but they don't fall into "pyramid scheme" definition.
Reply | Report Abuse | Link to thisAll the best:)
Depressed Citizen.
RSchmidt, you are entirely focused on the idea of Bitcoin as "printing your own money". While you are not alone in that line of thinking, there is much more to Bitcoin than mining. In fact, Bitcoin is designed to reduce the impact of mining over time with the scheduled reduction of rewards.
Reply | Report Abuse | Link to thisAs a casual bitcoin user, I do not mine my own coin. I purchase from exchanges and spend some and keep the rest in "savings". My favorite thing about BTC is that when I buy something from a merchant I don't have to worry about my credit card info being stolen or misused. I am in complete control of my information and money.
Completely wrong.
Reply | Report Abuse | Link to this<"People who earn bitcoins through "mining" are being paid for verifying and securing network transactions in a highly competitive market." is also a misrepresentation. The fact is the return on investment declines as more coins are created. Creators are not paid for verifying and securing because if they were their income would increase as the cost of those tasks increases.>
They are paid. The transaction fee is usually between $0.10 and $.040, and may increase in the future.
<The fact is people are paid for being early adopters and they make their money of the people entering the market after them. That is a pyramid scheme.>
Again, you have no idea what you're talking about. The early adopters get absolutely no benefit from more people bringing new hardware online. Roughly 7200 bitcoins are produced every day regardless of how many machines are mining, and with each new miner starting up, everyone else's piece of the pie gets smaller. It's actually the opposite of a pyramid scheme, the big players are driving everyone else out of the production market by upgrading to more powerful, energy efficient hardware. If they were looking to cash out and make a quick easy fortune, it would have happened already. Instead, they're reinvesting and making the network more powerful and secure. The real question is whether Bitcoin can remain decentralized when GPU mining becomes obsolete.
RSchmidt, you are incorrect when you say, "The early adopters made the majority of the coins." Simply because "the majority of the coins" haven't even been minted yet. However, early adopters have minted a majority of the existing coins. Everyone using Bitcoin right now could be considered an "early adopter" whether they mined or bought the coins since it is so new. Regardless, a vast majority of the miners sell their coins to pay for mining electricity and hardware costs. I would bet that most coins are now held by people actually using the currency or people speculating on future prices like any other currency futures exchange. You stated it is a pyramid scheme because, "The fact is people are paid for being early adopters and they make their money of the people entering the market after them." The definition of a pyramid scheme is: "A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public." I personally believe Bitcoin is substainable and people will get the services they desire when utilizing Bitcoin. There definitley is risk, but not so much that it makes it a pyramid scheme (in my opinion). A pyramid scheme requires exponentially more "participants" to sustain itself. Bitcoin does not need any additional "participants" to continue to function in its current state. If no more people started using Bitcoin, then the price would slowly fall as more and more coins are created... eventually to the point where mining is not feasabile to some people... In this case Bitcoin would still exist/stabalize at a price point and people who use it currently could continue use it and it would not rely on new "participants." Obviously, getting more participants to use Bitcoin is in its best interest, but not required. If it was a pyramid scheme, more participants would constantly be required.
Reply | Report Abuse | Link to thisDisclaimer, I have been a Bitcoin miner for a year, but have not paid off my assets. I've had to order new hardware to "keep up with the times." I assume I will have to incur new hardware costs every couple years to keep up with changing technology. If the Bitcoin price falls below hardware/electric costs, then I would have to stop mining. There are fundamental supporters that will mine as long as Bitcoin exists, even if they make no profit. Simply because they believe in it, much like people do for SETI/Folding at Home and other similar projects.
Wow the faithful are out in droves! We've got every canned argument under the sun from; bitcoin isn't a scam because it is like other things that we don't call scams to; bitcoin isn't a pyramid scheme because if you take a literal interpretation of this quote I got off the internet there are some difference, to; so what if it's a pyramid scheme, it's cool, and finally, my favorite, the conspiracy theory, I only think it's a scam because somehow I am threatened by it. Scary virtual money!
Reply | Report Abuse | Link to thisWhatever. It's your money. And you know what they say about fools and their money. All that I hope is that when the whole thing comes crashing down you don't go running to the government with your hand out crying that someone should have protected you from yourself. Remember, bitcoin is not too big to fail.
Mr, RSchmidt, so if we agree that bitcoin is the same type of pyramid scheme than gold (remember, the descendants of early discoverers of gold deposits now hold most of yet unmined gold...) and stockc (the first buyers of google represented the top of the pyramid once...). Fine. But that's certainly not in accordance with standard pyramid scheme definition (say this one: http://en.wikipedia.org/wiki/Pyramid_scheme).
Reply | Report Abuse | Link to thisBecause that definition clearly states that pyramid scheme is a non-sustainable business model. And that is because that kind of business model would require new and new customers to even continue to exist. But with bitcoin that is not the case. If owners of bitcoin would decide that they will from now on use btc to trade between themselves, nothing special would happen - the currency would continue to exist. Because already there are stores accepting bitcoin and people using it to buy goods or services. That is the point of the digital currency, afterall. If you still insist that this is a classic pyramid scheme, than I believe that your understanding of concept of pyramid schemes is severely flawed.
As for the end, your remark of bitcoin's ability to fail is noted: that is certainly a possibility. Just as there was such a possibility if one bought GOOG stocks in 1998. Or, perhaps, FB stocks :-) Bitcoin is a young, non-established concept. And to invest in definitely brings significant amount of rick. If someone cannot cope with that, it is advised, at least for now, that he stays away from it. In the end, usefulness will make the difference whether bitcoin will survive. If it will be used for trading, shopping, paying, then all will be well. If not, nobody will want it, its price will drop and that will be the end of it. And in that case goverment would not help. Bitcoin is afterall not recognised as a currency - that is its most defining charachteristic, sometimes desirable, sometimes not.
It's as much of a virtual currency as using a CC. It's real enough to me when it pulls $$ out my bank acct. What are they implying saying Paypal is a virtual currency??? weird...
Reply | Report Abuse | Link to thisI think your misunderstanding of what a pyramid scheme is has you mislabeling Bitcoin as such. Perhaps there is a debate to be had about whether or not the way Bitcoin is designed is some kind of fraudulent scheme. Whatever scheme that may be, it does not fit the generally accepted definition of a pyramid scheme.
Reply | Report Abuse | Link to thisThe nature of earlier investments realizing a greater value over time (as a result of subsequent investments) is not a pyramid scheme, that describes one of the most basic models in economics.
TL;DR Let's not get hung up on a specific label that doesn't quite fit.
@RSchmidt Pyramid schemes are not sustainable. Bitcoin (the ledger) is sustainable.
Reply | Report Abuse | Link to thisRSchmidt wrote: "The fact is the return on investment declines as more coins are created."
Reply | Report Abuse | Link to thisRSchmidt, fyi- you state the above quote as a fact. Are you not aware that the price of bitcoin floats upon supply and demand, on exchanges all over the world?
See, for example, http://bitcoinwatch.com/ or http://bitcoincharts.com/markets/ for real-time market rates in various fiat/government currencies.
Thus the return on investment for bitcoin is not predictable, any more than the stock markets or forex markets are predictable.
Here is a reasonably-comprehensive introductory article on bitcoin: http://www.wired.com/magazine/2011/11/mf_bitcoin/
Bitcoin is the first globally-used cryptocurrency, i.e. encrypted medium of exchange.
From the FBI and FTC definitions, "A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public." http://en.wikipedia.org/wiki/Pyramid_scheme
Bitcoin may continue to do well for some time, or it may fail in the near future, or be replaced by some superior form of cryptocurrency.
However, it does not properly fall within the category of a pyramid scheme, in that it is not a business model whatsoever.
Also, it does not promise participants payment, services, or a return upon investment.
Bitcoin is an encrypted digital medium of exchange, with a computationally/cryptographically limited supply regulated by a global peer-to-peer network. http://en.wikipedia.org/wiki/Peer-to-peer
Twenty-one million is the maximum number of bitcoins that can be created, and approximately 10.25 million have been created at the time of this writing. Creating bitcoins requires substantial computational resources. However the computational difficulty adjusts automatically, such that bitcoins are created at a predictable and limited rate. See, for example, http://en.wikipedia.org/wiki/Bitcoin#Economics
The bitcoin peer-to-peer network is currently the largest distributed computer in the world, over twenty times larger than the second largest which is Folding@home, a protein folding project. http://en.wikipedia.org/wiki/List_of_distributed_computing_projects
For an introduction to the technical fundamentals of bitcoin, see the original paper by Satoshi Nakamoto: http://bitcoin.org/bitcoin.pdf
daniel.inform said "The bitcoin peer-to-peer network is currently the largest distributed computer in the world, over twenty times larger than the second largest which is Folding@home, a protein folding project. http://en.wikipedia.org/wiki/List_of_distributed_computing_projects"
Reply | Report Abuse | Link to thisI don't see where you get this claim, as the link shown indicates that Bitcoin does not use floating point so it isn't even comparable to things like folding@home in total teraflops. The number of nodes is only listed as "thousands".