http://www.hpcwire.com/hpcwire/2012-10-09/digital_gold_rush_powered_by_gpus.htmlRobert interviewed Peter and I about a month ago. The article is mostly about CoinLab and what we are doing in relation to the HPC world, but there is a nice, concise explanation of Bitcoin for the tech savvy in the introduction:
Bitcoins started as a small community-based project back in 2009 and has developed into an active online economy with users trading virtual currency for goods, services and even cash. Virtual currency has several advantages, the primary one being that it doesn't have to answer to a central bank or national government.
Since there isn't a central bank for the virtual currency, all transactions are generated and verified by the user base. Each computer running a Bitcoin client keeps a copy of the transaction data, which is updated every ten minutes. The transaction database serves as a central point of reference to all members of the community.
To reduce the chance of individuals hacking the database or attempting to rewrite its history, each update is encrypted with a cryptographic hash function. Here's where the compute challenge comes in. Over time, the difficulty of processing the hash increases in order to keep pace with faster computers and more transactions.
Decoding currency transactions requires plenty of computational power, but the user that successfully solves the hash is rewarded 50 Bitcoins. This process serves two main functions; it encourages the community to validate the currency's transactions, while simultaneously growing the Bitcoin economy. The users that offer up cycle time to solve the transaction encryption are essentially 21st century gold miners. And since they're gamers, they tend to use GPUs as the computational engines to gather their treasure.
