This is going to be a long post; I hope I took the right "tack" with it, as Bitcoin is HUGELY complex. So many simplifications are employed
Please bare with me as the whole picture needs understanding, not a glib one off paragraph.
General
The whole premise behind Bitcoin, is it is an alternate form of currency replacing traditional Bank Transactions. It has the support of the Banking industry in its aims, and Bitcoins are quoted by various international exchange trading agencies. They retain a Market driven value, and can be exchanged for other currencies. Their value can be volatile, and speculators - surprise surprise - have been known to target them, like they do other currencies. In fact at one point there was a famous crash in their value, that drove it to near zero after a few million electronic Bitcoin were stolen from an electronic respository. Overall therefore it can be volatile. The famous theft and crash is outlined in :
http://www.bbc.co.uk/news/technology-13857192
A typical Bitcoin exchange is at:
https://mtgox.com/
Wikipedia Entry:
http://en.wikipedia.org/wiki/Bitcoin
What Bitcoin Does
We are all so used to how we pay for things, we *tend* to lose sight of what is actually happening. A payment Transaction consists of three parts:
1. Party A pays the Bank
2. The Bank revives the payment, deducting value from Party A, and holds the money whilst organising payment to party B
3. Party B receives the money from the Bank.
Third Party Transaction Model
It’s known as a "Trusted Third Party Transaction". ie the Banks are trusted to hold the cash and pass it to the one entitled to receive it. The model has grown up over the Centuries as a way of getting payment to individuals especially in the days when travel and communications were impossible/very hard. Sometimes taking weeks to get the money to them. These days of course, the "transmission" of money is fast due to the computer driven technologies. However, all that happen was the Trusted Third Party Model was - eventually - made electronic. No attempt to create a new Transaction model was made.
Now think of what is happening. Actually what we want is the ability for Party A to pay direct to Part B the money owed. In a transaction, there is no need for a Bank. In the Bitcoin model, when a payment transaction is released it is utterly irreversible, no one can ever reverse a payment. If an error is made by Party A, they can’t get money back unless Party B issues a transaction to repay them.
The Age of the Internet and computers has made this direct model possible. After all why pay a Bank to make transactions, as long as the transaction is guaranteed, it only adds cost to everyone to use a huge Banking infrastructure. Banks are happy enough, the biggest cost they have is maintaining Transaction infrastructure, they would close that in a heartbeat if another system replaced it.
However ...... to do that electronically is massively, unbelievably complex, I'll cover that below. There are problems with it at present as the concept has a long way to go and devlop working through all the issues that lot causes. But essentially it "1984" and Big Brother in spades where "credits" are transferred as payments. At present there is much to do to make Bitcoin transparent and workable. It does have the support of the Banks, and Bitcoins can be used today to pay for goods and services over the Biotcoin network.
The Nature of Bitcoins
To go through the detail is massively sleep inducing, its so incredibly complex many serious programmers can get set back a pace by it. So only a "concept" is described below. Essentially the system works by "blocks" spinning round the network, and the block passes across the transaction value as it arrive at each recipient. When it gets there, the recipient adds a string - a laaaarge string - of numbers to a part of the block as an identifier. At each transaction point more numbers are added, and so on. The numbers are a form of encryption that serve both to protect (kind of encrypt) the transaction, and to make it impossible to electronically break into the actual transaction - to date it’s never been done. The famous crash this year was a recipients local Bitcoin repository, not transaction stealing.
Whilst all this is going on, Bitcoin add "hashes" to each block. There are a fixed amount, I believe it’s around 22 million, the number will never change. The Hashes have a fixed value of 50 Bitcoins. People/organisations are encouraged to try and solve a Block to find the Hash. When they do, they get 50 Bitcoins as reward. The reason for this, is the Bitcoin Network gets more secure the more transactions flow, including the Block searchers, as more numbers get added to each block - the searching for hashes is the resilience and encryption mechanism, the more searches, the more resilient the network to outside computer attack.
What then happened is individuals started looking for Bitcoin Hashes with their own Computer, after all the early days a Bitcoin was worth £10-£15 - so a reward of 50 of those was pretty chunky. As computers became more powerful it became harder to find a hash. The reason is the network adjusts to the find and makes its harder to resolve a block - ie its self healing and self protection. You don’t need a Bank to guarantee the payment. This gradual increase in difficulty, meant searchers gathered together into "Hunt the Has" Groups, sharing the reward when found. All good, its increased network activity, and made the whole algorithm protecting actual transactions harder to resolve - impossible in fact. As long as there are more honest transactions flowing, than dishonest attackers, it can’t be broken - hence the Hash incentive, the latter keeps transactions high, and can’t be attacked.
Bitcoin and BOINC
Enter the BOINC Hash finders at Donate@Home
BOINC software is perfect for a Hash Hunting Group. WUs do the searching, Block resolving, and Hash finding Crunchers crunch WUs in the time honoured fashion. When hash's are found (two were found in the first week of Donate@Home, they received 100Bitcoinc, which at today’s rate of exchange is about £500 in total - that was with only around 100 crunchers. Extrapolate that to a larger number (say 2,000) and what may be achieved over a month or a year
The aim of Donate@Home is to find these Hashes and pay for an additional researcher (that around $20,000 a year’s needed for that, probably around 60 to 70 hashes to fund that - easily in reach of a Volunteer Hash finder group. Hence their astonished delight when the Volunteer BOINC crunchers got two in the first week!
They are also using this as a medium to train themselves on AMD Software so they can design better AMD based models (remember they are traditional NVidia CUDA, but they want to include AMD cards).
The Controversy
Leave aside the work needed in the long term for complete viability of the Bitcoin system, the work still to be done is massive, to make it a viable long term replacement currency and global Transaction facility ( so far its getting the Banks thumbs up approval, and they are guaranteeing transactions where needed - it saves the Banks a fortune). Right now, there is the opportunity to find these hashes and blocks with hash hunter groups, and It'll be like that for at least our lifetimes, likely forever in the self healing nature of the systems "encryption" software.
So is it all ethical for BOINC? That’s the rub of it. Simplistic attitudes have spawned simplistic reactions - "its cash - cash is bad for BOINC - therefore Bitcoin is bad for BOINC - Bitcoin is Bad".
Few ever give much thought to the nature of BOINC Volunteer computing. Antoine who believes we give our services meeting a need that can’t otherwise be filled, and is therefore a "cashless" form of giving is very naive. Any organisation with an infrastructure, who gets BOINC Project Assist, is well capable of diverting funds from that facility and using it for other things, ie essentially BOINC is a form of cash donation at its bottom line. Even in pure research. Some things would never get done if where not for BOINC - absolutely - that does not negate the fact that BOINC in majority of cases is in effect a form of cash donation - it’s just that no cash passes between donor and receiver.
All that happens with BOINC Hash Hunters is the proceeds go to the supporting Project. Do we need safeguards on disclosure and accounts - that’s for sure - but that’s not impossible nor is it onerous. The Crunchers know full well how many hashes they find, and if the Project don’t account for them - crunchers walk. So, as long as it’s done by reputable organisations all is well.
What if they are dishonest .... well... in that case they can be banned, crunchers will discover it easily enough. Banning use of OpenSource software is legal, if its use is itself illegal. So no problem.
The End ROFL:)
That, you will be delighted to know by now, is Bitcoin and BOINC ...... and I assure you it’s a very very compressed explanation that would make a Bitcoin Expert scream in pain. But it gives the concept, and where BOINC fits in. Can you shoot theoretical holes in BOINC use of it, yeah dead easy because the core system is hugely complex, all a mischievous moaner has to do is press a few emotive buttons, and Toilet Rumour Control does the rest. That’s is what has just happened when it all blew up inside BOINCLand on the onset of Donate@Home, cynics have a field day assuming that they are the only ones with common sense and knowledge - very irritating.
At the heart of BOINCLand there is no issue, it does not violate BOINC principles of giving goods and services to aid others, it just does it in a different way. It’s transparent, easy to do, and is a win-win all round.
You make think differently and think BOINC should not do this, and that’s cool, but at least do so with the full facts to hand not emotive half spoon fed toilet rumour initiated by drama seekers. Also do so in the knowledge that opposition breaks the very core of the Open Software Licence agreement that BOINC operates under .......
.. and contrasts with the refusal by BOINC to shut down a blatantly illegal site whose aim was to break commercial proprietary code - it took external non BOINC pressure to shut it down.
To learn more - Google is your friend and start by Googling "Bitcoin" - and get drowned in references to look up.
Regards
Zy
