Poor Mojo's Newswire

Before Bitcoins can be traded, though, they need to be created. That's where "mining" comes in. Mining is a process in which powerful computers create Bitcoins by solving processor-intensive equations. The idea is to keep the supply of Bitcoins from multiplying too quickly. Bitcoin mining, like mining of precious metals, is supposed to be arduous. By design, the more miners there are, the more processing power is required to mint new coins. Most people aren’t used to thinking in terms of the energy it takes to solve math problems; a few minutes of Excel may not take much energy. But make the problems complicated enough, and things change. “Mining” Bitcoins takes so much processor power that it’s often done with specialized computers optimized for rapid repetitive calculations. So how much power can that take? Blockchain.info, a site that tracks data on Bitcoin mining, estimates that in just the last 24 hours, miners used about $147,000 of electricity just to run their hardware, assuming an average price of 15 cents per kilowatt hour (a little higher than the U.S. average, lower than some high cost areas like California). That, of course, is in addition to the money devoted to buying and building the mining rigs. The site estimates the profits from the day of mining at about $681,000, based on the current value of Bitcoins. So mining, at least for the moment, is a lucrative business. More from Mark Gimein: The trade-off here is that as virtual value is created, real-world value is used up. About 982 megawatt hours a day, to be exact. That’s enough to power roughly 31,000 U.S. homes, or about half a Large Hadron Collider. If the dreams of Bitcoin proponents are realized, and the currency is adopted for widespread commerce, the power demands of bitcoin mines would rise dramatically.

Anyone who’s ever had to pay for a replacement cell phone, smart or otherwise, has tried the “But I swear, I didn’t get it wet!” argument when that little strip is pink, instead of white. But a new settlement has Apple paying out $53 million to customers who claimed the company didn’t honor warranties on iPhones and iPod Touches, all becuse of those pesky damage indicators. It all goes back to the little white-to-pink strips, notes Wired.com. Customers claimed Apple wouldn’t fix or replace their misbehaving devices under the company’s one-year standard, or two-year extended warranty. See, Apple would refuse to deliver on warranties if the white strip near the headphone or charging part had changed its hue to pink or red. But then the tape’s maker, 3M, chimed in and said simple humidity could cause the color to change. It wouldn’t have had to be dumped in a glass of water/beer/toilet water. Customers included in the lawsuit could get around $200 in payouts for their iPhone, iPhone 3G, iPhone 3GS, and the first-, second and third-generation iPod Touch.

The price of Bitcoin has imploded, falling from $266 on Wednesday to roughly $55 on Thursday. The best-known bitcoin exchange, the Tokyo-based Mt. Gox, has suspended trading for what it described as a 12-hour “market cooldown.” Nicholas Colas, chief market strategist for the ConvergEx Group, said it was a “great question” whether the currency could survive the wrenching up-and-down. “At this point I would say yes, since it has before,” Colas wrote in an email. But he noted that, unlike previous oscillations, Thursday’s collapse was taking place in the full glare of international media attention. “A lot more people know about Bitcoin than during the prior problems,” he said. To its supporters, Bitcoin has enormous promise. They describe it as the foundation stone of a Utopian economy: no borders, no change fees, no closing hours, and no one to tell you what you can and can’t do with your money. Some of that promise is being delivered: When Bitcoin first got its start in 2009, the currency could buy almost nothing. Now, there’s almost nothing that bitcoins can’t buy. From hard drugs to hard currency, songs to survival gear, cars to consumer goods, retailers are rushing to welcome the virtual currency whose unofficial symbol is a dollar-like, double-barred B.