a new CryptoCurrency
Bitcoin is a peer-to-peer network based digital currency. Peer-to-peer (P2P) means that there is no central authority to issue new money or keep track of transactions. Instead, these tasks are managed collectively by the nodes of the network... The limited inflation of the Bitcoin system’s money supply is distributed evenly (by CPU power) throughout the network, not monopolized by the banks.
Turn on Options->Generate Coins to get a few coins by helping to run the network. Bitcoin runs in the background when your computer is idle and should not slow down other programs. It may take days to successfully generate a coin, so be patient. The timing varies and depends on how much idle CPU time you contribute. The total eventual circulation of Bitcoins will be 21 million coins. There will never be more coins than that. The coins are entering circulation gradually, at a steady pace over many years, to nodes supporting the network in proportion to the CPU time they contribute. So it's Grid Computing with no value generated?
They seem to acknowledge that they are simply creating Artificial Scarcity as a Game Rule while hoping that people will start treating it as a Medium Of Exchange on that basis alone (plus the feature of anonymity).
John Robb notes that it can be a good Currency for Exchange Of Value despite being too risky for Store Of Value (because of speculation risk). But under that kind of model, unless your purchases equal your sales, you have to keep doing exchanges between BitCoin and a "real" currency, which adds financial and hassle overhead.
Apr'2014: reading list
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