Bit Coins Question,how do they work....?

Up to about six months ago, you could make a significant amount of money using a PC Miner rig with a good AMD graphics card (or 2 - 3 of them) - my setup was producing about one coin per week.

I shut it down for a couple of months during the summer due to the heat it produced & when I started it up again, the coin 'difficulty' level had risen so much the return had dropped to about 40p per day, not enough to pay for it's electric use..

All the present mining systems use dedicated ASIC (custom-made chip) hardware, and the backlog for buying these is so long there is no guarantee you will still make any significant amount by the time you get one.

However, at present the price for each coin is going up quickly as well, so you may be able to make something.

There is a fixed limit to the total number of bitcoins that can be produced, and once that is reached all mining rigs / hardware become worthless...

http://www.butterflylabs.com/

http://www.geek.com/games/incredible-bitcoin-minin...

Bitcoin is an open source, peer-to-peer payment network and digital currency introduced in 2009 by pseudonymous developer "Satoshi Nakamoto".Bitcoin has been called a cryptocurrency because it uses public-key cryptography for security. Users send payments by broadcasting digitally signed messages that transfer ownership of bitcoins, the unit of currency. A decentralized network of specialized computers verifies and timestamps all transactions using a proof-of-work system.The operators of these computers, known as "miners", are rewarded with transaction fees and newly minted bitcoins.[

Bitcoin has been a subject of scrutiny for its use in illicit activities. In 2013 the FBI shut down the Silk Road online black market and seized US$28.5 million worth of bitcoin from the alleged mastermind.[13] Theft of bitcoins has been covered extensively in the media.The risk of theft can be mitigated by generating and storing keys offline.

Commercial use of Bitcoin, illicit or otherwise, is currently small compared to its use by speculators, which has fueled price volatility.However, Bitcoin is also used to pay for products and services. Merchants have an incentive to accept the currency because transaction fees are lower than the 2 to 3% typically imposed by credit card processors. Notable vendors include OkCupid, Reddit, and WordPress.

Reception of Bitcoin by governments has been mixed. In November 2013 the United States Senate held a committee hearing to discuss digital currencies where the reception of Bitcoin was generally positive. In December 2013 China's central bank barred financial institutions from using Bitcoin, prompting internet giant Baidu to stop accepting the currency.

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