PCPlus 316: What is crypto-currency?

I’ve just reread this article and, damn, it’s interesting. I recall it being fun to write as well. In essence, I go from the properties of real money – cash is a physical object (coin, banknote), it’s really hard to clone these physical objects, and transactions with cash are anonymous and untraceable – to thinking about a digital representation of cash – it’s not physical but a collection of bits, unless we take care it’s really easy to clone it like any digital file, and how the heck do you “transfer” it from buyer to seller anonymously?

The answer to all this is Bitcoin. I discuss how Bitcoin solves all these issues and how more bitcoins are “mined” and added to the global pool.

At the time of writing I seem to remember the exchange rate for bitcoins to the dollar was going down the toilet, but recently it's much improved. There’s even a Bitcoin casino now (where, interestingly enough, its revenues can be verified because of how Bitcoin tracks transactions).

This article first appeared in issue 316, Christmas 2011.

You can read the PDF here.

(I used to write a monthly column for PCPlus, a computer news-views-n-reviews magazine in the UK, which sadly is no longer published. The column was called Theory Workshop and appeared in the Make It section of the magazine. When I signed up, my editor and the magazine were gracious enough to allow me to reprint the articles here after say a year or so.)

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