bitcoins so i set up a little operation mining bitcoins. it's an experiment that will likely end real soon. bitcoins are a form of internet currency. they are hyped as anonymous, secure, irrevocable, and distributed. which makes them very attractive to the black market. for obvious reasons. okay so here's how it works. i generate a random account number. i join the peer to peer network and broadcast that account 123 transfers 1 bitcoin to account 456. presumably in exchange for some good or service or good service. i digitally sign the transaction with my private keys. which anyone can verify using the public key associated with account 123. these transactions are passed around the network. each one is verified. they are accumulated into a block. and some 60,000 computers in the network set to work looking for a string of random bits that will produce a hash value with certain properties. like it's less than some difficulty value. there's no known way to do this other than brute force. ie a typical gamer box would take a year on average. but after 10 minutes or so, one of the computers finds a solution, adds the new block to the chain, and shares it with all the other computers on the network. and now we're ready for the next round. the winning computer is rewarded with 50 shiny new bitcoins. there are some pretty obvious issues. most of which have been addressed. like abandon the shorter chain when multiple solutions are found. and the number of bitcoins issued as payment decreases over time. and the difficulty of finding a hash solution goes up as more computers are looking for solutions. at current exchange rates, the cost of the electricity to run the computer is pretty close to the value of the bitcoins you mine. at current exchange rates. bitcoins have appreciated some 100,000% in one year. no, that's not a typo. obviously, they can't keep appreciating at that rate. but if bitcoins mined today appreciate by 10x over the next year, then mining could be real profitable.  ¶ 8:00 AM