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I just heard about BitCoin for the first time today, and I'm confused. My understanding of economics may not be the best, but I do know that money, as in the paper and coins we use in everyday life, has no value unless it's backed by something which DOES have value (such as the gold in the Federal Treasury). So I don't understand how BitCoins gain value. I understand they're created by computers doing complex mathematical equations, but...is the solution to these equations valuable? Is that what causes BitCoins to be worth something? Hopefully the answer to my first question will answer the second as well...once BitCoins are created, how is their ongoing value determined? For instance, I heard about a BitCoin value crash today. What criteria is used to determine changes in the market, and how are exchange rates calculated? Thanks in advance to anyone kind enough to answer my questions...I hope I don't sound like a complete idiot.