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Bits in pieces

Learning the right lessons from the online currency Bitcoin

By David Birch   August 2011

When a bunch of geeks messing around on the internet’s frontier get attention from the Economist and the New York Times, you have to take note. A new electronic money system called “Bitcoin” has been hailed by some as the first nail in the coffin for the world of fiat currencies managed by central banks. Others dismiss it as a Ponzi scheme.

Bitcoin is a decentralised, peer-to-peer means of exchange. You can buy a Bitcoin—which is just a string of numbers—on an online exchange; you can then send it (or a subdivision of it) to anyone else on the internet.…

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