“I was also impressed by a similar research project called PageRank, which was proposed later by two guys at Stanford named Sergey Brin and Larry Page. Brin and Page dispensed with Kleinberg’s bipartite hubs-and-authorities structure in favor of a more uniform structure, and made some other changes, but otherwise their idea was very similar. At the time, of course, I didn’t know that CLEVER was going to languish at IBM, while PageRank (renamed Google) was going to expand to roughly the size of the entire world’s economy.
In any case, the question I asked myself about CLEVER/PageRank was not the one that, maybe in retrospect, I should have asked: namely, ‘how can I leverage the fact that I know the importance of this idea before most people do, in order to make millions of dollars?’
Instead I asked myself: ‘what other “vicious circles” in science and philosophy could one unravel using the same linear-algebra trick that CLEVER and PageRank exploit?’ After all, CLEVER and PageRank were both founded on what looked like a hopelessly circular intuition: ‘a web page is important if other important web pages link to it.’ Yet they both managed to use math to defeat the circularity. All you had to do was find an ‘importance equilibrium,’ in which your assignment of ‘importance’ to each web page was stable under a certain linear map. And such an equilibrium could be shown to exist—indeed, to exist uniquely.”
1. Peer-to-peer algorithms: BitTorrent would like a word with you.
2. Distributed consensus: Paxos would like a word with you.
3. Proof of work: hashcash would like a word with you.
That said, I find the Bitcoin paper to be a delightful synthesis of a bunch of well known ideas.
Like saying that the first calculator was not a new kind of machine because valves existed and people made calculations before.
As far as I understand it, PageRank reduces to "find the principal eigenvector of a stochastic matrix," in which matrix elements represent the probability of transition from each web page to every other web page. To me PageRank is a successful application of a well-known algorithm.
Bitcoin's peer-to-peer protocol, on the other hand, is a new distributed algorithm. Prior to Bitcoin, no distributed algorithm existed capable of maintaining an agreed-upon blockchain of transactions in perpetuity.
EDIT: Removed the word "kind of" in response to mayank's and axus's comments below.