“As with an actual precious metal, Bitcoins are in limited supply- they must be mined. Unlike with precious metals, this mining is done purely by computer. Miners set their machines to run a series of complex calculations that tally up and certify all the transactions of other Bitcoin holders around the world. If the miner’s computers complete these calculations and solve a complex mathematical puzzle before anyone else, he earns about 25 Bitcoins as payment.” From BloombergBusinessweek: The Bitcoin-Mining Arms Race Heats Up.

+ Overstock is now accepting Bitcoins.