Among n identical-looking coins, one is fake and lighter than the others. The algorithm uses a balance scale to compare sets of coins and determine which set contains the fake in O(log n) comparisons. It works by repeatedly splitting the coins into two piles, comparing the piles on the scale, and discarding the heavier pile until the fake coin is found. If n is odd, one coin is kept aside and the rest split into two piles. If even, all n coins are split into two piles.