How much is one bitcoin worth?

[Art_from_Ark]

According to Kitco, $955, give or take a few cents. Or 989 Canadian dollars. Or 713 euros. Or 610 British pounds. Or 5706 Chinese yuan

http://www.kitco.com/finance/bitcoin/

[Locut0s]

1. I know a couple of people building bit coin mining machines....

I know at least one or two people building bit coin mining computers. I could have done so some years back when I saw others doing the same. Would have a tidy sum now if I did. Didn't see it going anywhere though.

[Art_from_Ark]

2. What I want to know is, who is paying these sorts of prices

for a "currency" that has no visible means of support?

Apparently the price shot up to over US$1,000 at one point when gaming company Zynga Inc. announced it would *test* allowing users to pay for the games using it.

[Aerows]

6. A lot of it is black market

and money laundering.

[Duer 157099]

9. What does that even mean?

A mining computer? Like a virtual sluice box? A bitcoin pan?

[Locut0s]

11. The way bitcoins works is that...

The way bitcoins work they require a lot of heavy duty number crunching to make the entire process secure. Transactions involving bitcoins have to be validated to ensure proper security and everything is on the up and up. This is done using algorithms that require a lot of computing power. So much computing power that places that accept bitcoins as currency aren't going to invest in the needed hardware to do all the verification and security work. So the solution to this is to distribute the needed computing power over many computers. In fact you can participate by donating the resources in your computer, the CPU and video card, to helping with these validation calculations. In exchange for donating your computing resources the bitcoin network monitors how much work you have donated to the network and will gift you free bitcoins in exchange for your work. People who do this are called miners and the computers they build dedicated to doing this are called bit coin mining machines.

Here's an analogy. Suppose that every business transaction required a billion witnesses to sign off on that the transaction was legit. These billion signatures are sort of like the algorithms and computing power that are required to verify and secure bitcoin transactions. Now it wouldn't be possible for either person involved in the transaction to find a billion witnesses, it would just take too much time. So instead there is a market of people who will offer their services to witness the transaction for you. In exchange for providing this witnessing service, in this case your computer resources, the bit coin network agrees to pay you money for every X number of signatures you provide, or in this case every X amount of computing hours you provide to the network. In this case you are paid in bitcoins.

So there are a lot of people out there building expensive, in the $2000 and up, computer rigs for the sole purpose of running them as bit coin mining machines in order to earn bitcoins in exchange for the service they provide the network.

I've got a Facebook friend who just posted a picture of all the hardware he just purchased to build such a computer. Knowing the price of the hardware I can tell you that rig is definitely in the $2000+ range. But this is the kind of heavy processing that is required if you hope to turn a profit doing this.

[Duer 157099]

12. whoa....

I was aware of distributed computing and crowdsourcing, but not this particular thing.

I've got a bunch of old boxes that I've been wondering what to do with..... Why do people build expensive machines for this? Won't any old box do? Or the more processor power/RAM/bandwidth you have, the more you make.

What are some typical incomes possible from an average machine?

Thanks!!

[Locut0s]

13. I'll have to ask my Facebook friend what kind of profit he expects to see...

It's definitely a bubble and everyone going into it pretty much knows it, but they are hoping to cash in on it while it's still expanding.

I doubt many people expect to get rich at this point off it. They see it as a way to maybe make a few thousand or so.

And yes while any hardware would technically work the amount of computing resources you need to donate to get one bitcoin is rather insane. Which is why they build these crazy expensive systems. But then at the current prices you only need to earn 2 - 3 bitcoins to break even on most of these machines.

The bitcoin market has been around for a number of years now. About 2 years ago I knew people who were just starting to build these machines back when the currency was no where near this valuable. If those people had held on to those coins they would have a tidy profit now.

I even thought of doing it some years back, too bad I didn't lol.

[TexasTowelie]

3. Bitcoins are now being used for political donations.

http://www.democraticunderground.com/107814181

[progressoid]

8. Wow.

That's...well...wow.

[ThoughtCriminal]

4. Depends. What time is it?

[Art_from_Ark]

5. The Kitco site shows "realtime quotes"

so the quotes can change from minute to minute. At last look, the quote for one bitcoin was more than 1000 Canadian dollars

What I want to know is, who is paying such money for this stuff?

[Aerows]

7. You can use it for anonymous weapons and drug transactions

that's why the price got so high. I wouldn't "bank" on it staying that high, though.

[Art_from_Ark]

10. So it seems the story about the price "surging" because some gaming company

was *testing* allowing its users to pay in bitcoins might not have been so... accurate.

[Chan790]

15. It is to an extent.

The more legitimate businesses and people accepting the virtual currency, the harder it is to crack down on.

For that matter, a large part of why no such crackdown has occurred and legitimacy has been garnered is because the virtual currency is not just useful for circumvention of US law but any nation's laws: it provides a means to support dissident activists and movements abroad. (and if you can't read the writing on the wall, that probably means the CIA is using it to fund insurrections among enemies.)

[Locut0s]

17. Interesting point I never thought of that possibility...

The government funding their overt opps with bitcoins. It makes perfect sense though as an untraceable, "invisible" currency.

[HappyMe]

14. 2 goats and a bushel of wheat,

or $500 in Monopoly money.

[Art_from_Ark]

16. I'll take the goats and the wheat, Monty