Tell me more about how Skype works?

Question

Can you enlighten me how Skype is working? Is it just PC through PC phone calls ? or does it block my land phone line?
Will it show up on my phone bill?
I signed up with it. Using it for conference calls. Now my question is to you how does it really work and how do they make money of it?

thanks for the detailed info on skype verblen.

Answer 1

Skype users essentially make telephone calls and video calls through their computer using Skype software and the internet. The basis of the system is free communication between users of Skype software; however the product also allows Skype users to communicate with users of regular landline and mobile telephones. This software is currently available free of charge and can be downloaded from the company website, but the software is proprietary and the Skype protocol is unpublished.

The main difference between Skype and other VoIP clients is that Skype operates on a peer-to-peer model, rather than the more traditional server-client model. The Skype user directory is entirely decentralised and distributed among the nodes in the network, which means the network can scale very easily to large sizes (currently just over 100 million users) without a complex and costly centralised infrastructure.

Skype also routes calls through other Skype peers on the network to ease the traversal of Symmetric NATs and firewalls. This, however, puts an extra burden on those who connect to the Internet without NAT, as their computers and network bandwidth may be used to route the calls of other users.

The selection of intermediary computers is fully automatic, with individual users having no option to disable such use of their resources.

This fact is not clearly communicated however and seems to contradict the license agreement, which limits Skype's usage of the user's "processor and bandwidth [to the] purpose of facilitating the communication between [the user] and other Skype Software users" (section 4.1).

The Skype code is closed source, and the protocol is not standardized but proprietary; this has raised suspicion and drawn some criticism from software developers and users.

The Skype client's application programming interface (API) opens the network to software developers. The Skype API allows other programs to use the Skype network to get "white pages" information and manage calls.

The Windows user interface was developed in Pascal using Delphi, the Linux version is written in C++ with Qt, and the Mac OS X version is written in Objective-C with Cocoa. Parts of the client use Internet Direct (Indy), an open source socket communication library.