Just out of interest... Bitcoin mining

[andybird123]

I don't understand bit coin mining

If people can mine bitcoins, who is putting the money in the system in the first place and why would they give away large sums of money.

people who have bitcoins can sell them to people who want bitcoins - people who have bitcoins can move them to anywhere in the world for no cost and then trade them for real money elsewhere, some people keep hold of bitcoins just on the offchance that they increase in value, which further constrains their supply, meaning people who want to use bitcoins for a purpose face higher costs due to limited supply

bitcoins only have value because people say they do... though in this they are very similar to cash or electronic money, my bank account says I have £xx,000
not because I have given the bank anything of actual value, but because someone has told my bank to put that value there

money in real bank accounts is trackable and traceable though, and bitcoins aren't

you can trade bitcoins on a memory stick if you want to

 

[Puppetmaster]

Its original use was for purchasing illegal goods because it can't be tracked.

 

[Catanonia]

Treat BitCoins / LiteCoins and all over Alt Coins as commodities such as gold and not currency and it will start to make sense.

BitCoins are gold that are mined. The mines are funded by each transaction carrying a very small fee to pay the miners.

BitCoins is like gold but untraceable and also limited in quantity (21 million BitCoins will only ever be in circulation due to the algorithms) and hence making them valuable.

Like anything rare, they get traded and they have there own stock exchange.

True, it is estimate that 50 - 70% of Bitcoins are used and traded by the illegal arms and drugs scene, but isn't everything.