About a month ago, Paul introduced me to Bitcoins, a form of virtual currency. The mechanics behind how Bitcoins work involves a lot of math and cryptography; if you're so interested, read the Bitcoins FAQ page. Like other currencies, Bitcoins can be bought for or sold for actual cash. The current trading value is about $14 per bitcoin. Like regular cash, bitcoins can be used to buy things from other people, or you can accept bitcoins for your goods.

The more interesting part for us is how bitcoins are created:

How are new Bitcoins created?
New coins are generated by a network node each time it finds the solution to a certain mathematical problem (i.e. creates a new block), which is difficult to perform and can demonstrate a proof of work.

Read 'network node' as 'your computer'. People solving a 'block' - which is used to validate transactions like sending and receiving bitcoins - get some bitcoins as a reward. To make an analogy with real cash, pretend someone wants to give money to someone else. You act as the witness, saying "Yes, party A gave X dollars to party B". As a reward for this, you get a small amount of cash.

Shorter version: Your computer can generate bitcoins. Since they are tradeable for real cash, you can make money; or buy things directly with bitcoins. More on that in a moment.

In turns out that modern video cards, particularly those made by ATI, are extremely good at solving these problems. If you're not familiar with using a video card for non-video work just remember that a graphics card is essentially a miniature computer made to handle graphics issues. It can be made to do other things quite well. Take a look at the Bitcoin hardware chart to see the relative comparison of cards. Making bitcoins in this manner is called Mining.

Solving an actual whole block is a ton of work, even for a fast video card; it might take months. Instead participate in a mining pool. This works like other distributed-processing projects. Small chunks of the problem are assigned to a lot of people, and when the problem is solved, everyone gets a payout based on how much work they did.

If you've followed along so far, you've figured out that you can use your video card, the same one you probably play EVE with, to generate bitcoins which can be turned into real cash. Alternately you can do what I did, and buy a GTC directly for bitcoins, from Bitcoincodes. For 2.88 Bitcoins, I received a GTC, with no issues at all.

I have two video cards, an ATI 5770 and an ATI 5750, which gives me a total of about 0.15 bitcoins per day. This gives me a single bitcoin every 12 days or so; or a whole GTC about every 4-6 weeks. The price of a GTC will vary based on the actual cash value. I could convert my BTCs into cash and buy a GTC that way, but this is more trouble for me than just buying the GTC directly.

Like Paul you may determine that your extra electric cost of mining cancels out the value. If you have cheap electric service or don't pay for your electricity (college kids I'm looking at you), then this is a win.

To get started download and setup GUIMiner, the easiest way to start mining for coins. You'll want to use a bitcoin pool. I recommend deepbit.net, but there are several other options. Finally you'll want the official bitcoin client so you can store bitcoins in your 'wallet' and buy things with them.

I leave my client running all the time. Performance under EVE is very good. I see a reduction in mining speed, but it's still excellent. If you're really serious about mining, buy a modern ATI video card. An Radeon 5770 can be had for about $100 and will give you around 0.08 bitcoins per day.