A Ripple in the online payment waters

Rob Beschizza 6:13 am Mon Sep 30, 2013

Robert McMillan on Bitcoin "maverick" Jed McCaleb, who started Mt. Gox and now offers Ripple, an alternative to the digital currency. [Wired]

After selling Mt. Gox, McCaleb started thinking more deeply about Bitcoin. He was a huge fan, but he thought he could so some things better. First, he wanted to do away with Bitcoin mining — the process by which computers on the network verify transactions in exchange for Bitcoins. Because miners are rewarded in proportion to the processing power they add to the network, Bitcoin mining has become a bit of an arms race, with very specialized and powerful computers now doing the bulk of the work. McCaleb, a 38-year-old surfer and Berkeley dropout from Little Rock, Arkansas, sees this as excessive. By his reckoning, there’s $160 million spent annually on mining the Bitcoin network, “which is insane,” he says. “And this isn’t something that’s going to go away. It just gets worse and worse.”

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