By Jon Matonis
Tuesday, May 7, 2013
Bitcoin is the largest distributed computing project of all time. Through a smart mathematical model and the use of peer-to-peer networking, it offers a fantastic and necessarily liberal way for people and organisations to transact.
recently surpassed SETI, the search for extraterrestrial intelligence,
as the largest distributed computing project in the world. By using the
fast computing horsepower available globally, and long-standing
cryptographic primitives, Bitcoin offers effective and affordable
transactions without an intermediary.
Bitcoin is a currency that can be thought of as file sharing for money. It's simple to use, open source,
and available to everyone. Individuals can buy Bitcoins, and trade them
online, send them to friends or family, or use them to buy goods or
services. Simple exchanges conduct transactions and companies such as
BitPay set up the merchants and absorb any currency risk. Individuals
and organisations can check the value of a Bitcoin at any time on
This method of transacting offers a huge change from existing services
such as banks or the likes of Western Union or MoneyGram, for which
people have to pay fees to send money. It liberalises the whole
transaction by removing the intermediary and allowing people to trade as
they wish. Finally, there is a system that suits the user.
has been a lot of talk over whether there is a Bitcoin bubble, given
the changing value over previous weeks. Our perspective is that there is
not, and that it was a case of media talk exacerbating a change.
Bitcoin is here for the long term, over 11 million Bitcoins are in
circulation (and the number will eventually be limited to 21 million in
total), and the currency's value is clear now and over the coming
Individuals, globally, already use Bitcoin to send money
to other individuals or to organisations. Some of the more high profile
organisations that accept Bitcoin currency include dating site OKCupid,
the WordPress blog, as well as donations to organisations such as
Wikileaks. But it is available to everyone globally, and can be used in
theory for any transaction. Organisations can easily receive Bitcoins by
adding their receiving email address on their website.
been concern expressed around regulation. Actually, we speak regularly
to the regulators, and we express our perspective that Bitcoin offers a
very useful service for individuals and organisations wanting to
transact, and that we are an important part of the economy. There is
good scope for sensible regulation on exchanges. Four countries - the
US, France, Norway and Australia - have issued explanatory notes on the
currency as it gains importance.
Unlike many of the payment
processors, Bitcoin does not act as an intermediary and there is a
minimal charge for using the service. It is available to any country and
any person using an Internet connection on any device - supported on a
P2P network with all transactions going through the Internet. Technology
has enabled this phenomenal change.
What the foundation does
The Bitcoin Foundation,
created seven months ago, acts very much in the way the Linux
Foundation acts for open source software. We recognise that effectively
we are up against established companies, and therefore a foundation is
essential in promoting a level playing field for Bitcoins and discussing
the issues around currency. Additionally, we focus very much on the
standardisation of Bitcoin so that it is easily used globally.
also do fundraising and compensate developers, as well as organising a
grant program to advance the protocol. Although we are based in the US,
60 per cent of our members are elsewhere around the globe.
This May, we are hosting a conference on the future of payments. We will cover all the business, regulatory and economic, and technology issues.
Foundation is here to preserve Bitcoin. It's important because never
before have we witnessed valuable remote transactions that don't require
intermediaries. We are a nonpolitical organisation and the world's
foremost educator on the currency. Rather than enter moral issues around
money or who spends it on what, we are keen to promote freedom of
choice, through an open source P2P network, with regard to money.