Ask the Delphic Oracle: INNOVATION: FAQ on Bitcoin

Note to recruiters

Note to recruiters: We are quite aware that recruiters, interviewers, VCs and other professionals generally perform a Google Search before they interview someone, take a pitch from someone, et cetera. Please keep in mind that not everything put on the Internet must align directly to one's future career and/or one's future product portfolio. Sometimes, people do put things on the Internet just because. Just because. It may be out of their personal interests, which may have nothing to do with their professional interests. Or it may be for some other reason. Recruiters seem to have this wrong-headed notion that if somebody is not signalling their interests in a certain area online, then that means that they are not interested in that area at all. It is worth pointing out that economics pretty much underlies the areas of marketing, strategy, operations and finance. And this blog is about economics. With metta, let us. by all means, be reflective about this whole business of business. Also, see our post on "The Multi-faceted Identity Problem".

Wednesday, April 16, 2014

INNOVATION: FAQ on Bitcoin

For those new to Bitcoin, here is a FAQ on Bitcoins. It answers some of the basic questions that people have on Bitcoins.

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General

What is Bitcoin?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominenttriple entry bookkeeping system in existence.

Who created Bitcoin?

Bitcoin is the first implementation of a concept called "crypto-currency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers working on Bitcoin.

Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin's inventor is probably as relevant today as the identity of the person who invented paper.

Who controls the Bitcoin network?

Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.

How does Bitcoin work?

From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.

Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining". To learn more about Bitcoin, you can consult the dedicated page and the original paper.

Is Bitcoin really used by people?

Yes. There is a growing number of businesses and individuals using Bitcoin. This includes brick and mortar businesses like restaurants, apartments, law firms, and popular online services such as Namecheap, WordPress, Reddit and Flattr. While Bitcoin remains a relatively new phenomenon, it is growing fast. At the end of August 2013, the value of all bitcoins in circulation exceeded US$ 1.5 billion with millions of dollars worth of bitcoins exchanged daily.

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Dude, where's my column?

Ah! The column. You see, the column doesn't run at the Times of India Group's indiatimes.com site any more. All columnists were taken off the Indiatimes.com site.This blog keeps the 'Ask the Delphic Oracle' thing going. If you want to view past columns, search for "All Articles and Posts for the Times of India Group". You will see a list of links in a widget underneath that heading. (e.g. Link to the column "The world's largest prime"). All the columns for the Times of India Group may be found underneath the "All Articles and Posts for the Times of India Group" heading. So, there you go.

About Us

First of all, a note. None of us are bloggers per se. We are engaged in business research, software engineering, computer science & mathematics research and journalism among other things. Thus, what we are doing here is really presenting high quality information in the form of a blog. Being a blogger is not something to be ashamed of, but here is something that we would like to warn you ahead of time: we expect standards of communication much higher than that in the average blog and Facebook profile. Not that this is nescessary for you, gentle reader, but please maintain professionalism and courtesy in all your communication with us in the context of this blog.

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Anand Manikutty got his undergraduate degree in Computer Science from the Indian Institute of Technology, something for which he still gets ribbed. He has pursued graduate work at the University of Wisconsin, the Harvard Business School and Stanford University. He is a technology entrepreneur and inventor holding over 15 patents in computer science and technology. He has over 15 research papers in computer science and engineering. He has also contributed to a textbook on strategic management. He splits time between Monterey and the crazy, exciting San Francisco Bay Area. He is working on this column in collaboration with Prof. Krishnan Shankar. Krishnan Shankar (Ravi to friends) is a Professor of Mathematics at the University of Oklahoma. His professional trajectory started in Mumbai at Ruparel through Reed College in Portland, Oregon and the University of Maryland, College Park where he obtained his Ph.D under Karsten Grove in differential geometry. His latest creation is by far his best and most demanding: his daughter, Sophie Mallika, who renews his sense of the miraculous on a daily basis. Prof. Sankaran Manikutty was a Professor (with tenure) at the Indian Institute of Management Ahmedabad. His profession trajectory started in the Indian Railways where he worked for more than two decades. He obtained his Ph.D. in Strategy (an area that used to also be called Business Policy) at the Indian Institute of Management Ahmedabad. He joined as faculty at the Indian Institute of Management Ahmedabad and rose to the position of Professor. He is now retired from service. ~

What is "Ask the Delphic Oracle"?

"Ask the Delphic Oracle" is a blog created for a Science/Technology, Mathematics and Innovation column of the same name for the Times of India Group. (It is now a spin-off from the newspaper columns and, what's more, has survived the demise of the Indiatimes.com columns section itself. The themes of the blog are Science/Technology, Mathematics, Innovation and Economics with American Studies as a focus area.) The blog is maintained by Anuradha, Anand Manikutty in collaboration with Prof. Krishnan "Ravi" Shankar. All columnists and opinion writers have been taken off Indiatimes.com, and so we will no longer be running there. At the same time, this blog has taken a life of its own and besides, there are some loose ends to tie up, not the least of which is a summer puzzle contest we conducted in association with the Stanford Math Circle. So, posting on this blog will continue, and our association with the Stanford Math Circle will continue as well.

The theme of the blog is, as you know, science, mathematics and innovation, and so we post links to news stories on science, mathematics and innovation. We do love mathematics and so we also do another thing - we use mathematical principles whenever we can, wherever we can. Given that mathematics finds applicability virtually everywhere, we make posts on a variety of themes and subjects not directly related to mathematics.

So, enjoy the blog. Enjoy the math.

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