Ahh... I knew Git was basically started with that Bitkeeper war, but since I don't really follow linux politics much as I don't use it all that often, I didn't realize that hg was started then as well. They seem very similar in their paradigm shift away from the central repository style of CVS and SVN. Is that a coincidence or was Bitkeeper also in this everything is a branch method?
I think it was Bitkeeper's solid decentralized workflow that convinced Linus that VC would even be feasible for kernel development; hg and git were written after people realized that they could no longer do without the features that Bitkeeper had.
