The X Prize is a $10 million prize that will be awarded to the first privately operated team (Excludes NASA ESA etc) to build a craft that can carry 3 people into space and back down again safely. Then repeat the feat using the same craft within a two week time frame.
Object of the x-prize
To accelerate the move towards space tourism and to get private companies and individuals involved in looking for creative solutions to reaching space.
The privateer effect
One of the most commonly asked questions about the X-Prize is 'what's the point? How can a privately backed team compete with government backed space agencies such as NASA with their massive budgets? Well, the answer is they are not really in competition. The government backed agencies are now more focused on doing things in space not getting there. For instance, when the European Space Agency launched its recent Mars Express mission, it used the Russian Soyuz/ Fregat launch package to send it on its way. Why? because Soyuz / Fregat is relatively cheap but most important of all it is extremely reliable and nearly always successful. If you have just spent $100 million on a space probe to investigate Mars, you want it to get there.
By getting a bunch of privateers involved in the x-prize, the engineers on each team will have their minds focussed purely on the goal of getting a re-usable spacecraft to carry people into space. Each team is likely to approach the challenges in different ways bringing a wide scope of innovative ideas. It is highly likely that when the next generation of space shuttle is designed by NASA design concepts from the x-prize entries will be used.
So can these privateers really make an impression on space flight on shoe-string finances?
If you want proof of how small budget privateers can provide major breakthoughs, you need look no further than the dunes of Kittyhawk. The first successful manned powered flight was not achieved by a powerful corporation, government backed organisation or one of the great universities. It was achieved by a couple of bicycle builders who built the first aeroplane in their workshop... and look what that started.