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Opinion
Leonid Bershidsky

Did Ukrainians Almost Take Over Bitcoin?

An organization with links to Ukraine has come close to dominating the issuance of the electronic currency. 

Bitcoin was designed to be a currency free from the corrupting influence of government or any other centralized authority. Now, though, with the value of a single electronic unit hovering around $1,000, the battle to control emission of Bitcoins is on.

The developers of Bitcoin created an ingenious system to regulate the currency's supply: Independent "miners" earn new currency by using their computers' processing power to perform the mathematical operations needed to make transactions in Bitcoin possible. The operations become more difficult as the amount of Bitcoins issued approaches a limit of 21 million.

Initially, a home computer was all one required to become a Bitcoin miner. As the market grew, high-performance graphic cards became the tool of choice. Nowadays, most of the mining is done by dedicated devices called application-specific integrated circuits, and miners form pools that allow them to earn a regular, small profit instead of the occasional and improbable big payoff.