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Google Engineer Releases Open Source Bitcoin Client
angry tapir writes "A Google engineer has released an open source Java client for the Bitcoin peer-to-peer currency system, simply called BitcoinJ. Bitcoin is an Internet currency that uses a P2P architecture for processing transactions, avoiding the need for a central bank or payment system. Cio.com.au also has an interview with Gavin Andresen, the technical lead of the Bitcoin virtual currency system." Update: 03/23 16:22 GMT by T : Confused? BitcoinJ author Mike Hearn points out this video explanation of how Bitcoin works.
I've been working on a full client implementation in python https://github.com/phantomcircuit/bitcoin-alt
Just so people know BitcoinJ is not a full p2p node.
The thing with bitcoin is that there is no central authority to control it. New bitcoins come about by "mining", not by some central authority minting new coins, or printing new notes. Gold too has collapsed in value before.
What makes a currency worth something, is that people are willing to accept it in exchange for goods. Gold is only worth as much as it is now, because people are all like "ooh, shiny". It's intrinsic value (what it can be used for), is not anything like how much people are willing to pay for it.
Bitcoin is more like gold than traditional government issued currency. There is a fixed amount (there will never be more than 21 million bitcoins, though as that amount is divisible to eight decimal places, that's not a problem). It's value is not centrally decided.
E-gold collapsed because it was controlled by one company. Bitcoin isn't controlled by anyone. Anyone can download the "official" client, or one various mining software, and mine their own bitcoin. You could arrest everyone who has ever touched the bitcoin client source, and the blockchain would still exist.
Bitcoin, it's peer-to-peer, that's the advantage of it.
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Written by someone who has absolutely no clue on how it works. Thanks for your incredible insight.
I've used Bitcoin and I can tell how it works. It's an elegant system for producing cryptographically signed "currency" which can be exchanged over P2P. However elegant it may be, it's also quite naive and/or dishonest to overlook some of it's shortcomings.
Namely, it is the people who got in early and mined coins or bought them at a low exchange rate who have most to gain. Latecomers have little to gain and the most to lose. If the system collapses or is regulated out of legitimacy, it is the latecomers who will suffer the most. I would not go so far as calling it a pyramid scheme but it certainly shares some similarities in terms of who benefits and who does not.
How could it collapse? In numerous ways. Various governments might start auditing / taxing people who use it as a form of currency. They might legislate against it, deeming it to be bogus financial instrument. It might get a reputation for money laundering and all the popular exchanges get shutdown along with the accounts. A rival to bitcoin might appear which is easier to use or has other benefits.Someone might develop a crack / exploit which allows them to inject "poisoned" transactions over P2P where the database is corrupted, or worse compromises Bitcoin such that wallets are wiped or drained of funds. A popular exchange is hacked and all the money is stolen. There might be a run on bitcoins if the system shows sign of collapse / compromise and the exchanges refuse to exchange bitcoins into dollars.
All of these scenarios are feasible and I think it only a matter of time before the system is hit by one of them. I have no issue with bitcoin per se but I do not see the long term viability in the system.
Here is a video, for non-technical persons, to help understand Bitcoin:
http://www.weusecoins.com/
It was just made very recently (today!)