Quote from stevegee58:
It's all about engineering trade-offs. You can solve any algorithm on a normal CPU. CPUs are very general-purpose by design, so you trade speed and power efficiency for maximum flexibility.
A graphics card (GPU) is like having hundreds of more specialized CPUs in parallel. These parallel CPUs are not as general-purpose as the CPU in your PC. To play video games, run CAD software etc you need more speed or the frame rate is painfully slow. GPUs deliver that speed but produce lots of heat so they frequently have multiple fans.
Bitcoins can be mined on your PC's CPU veeeeery slowly. They can also be mined on a GPU but about 100x faster.
Butterfly Labs' ASIC design takes another step in the direction of specialization. An ASIC is a custom chip that's designed for one specific purpose; in this case mining Bitcoins. They aren't useful for anything else, just mining Bitcoins. By making a chip for a single purpose the extra logic to make it more general purpose is left out. Less logic gates = less power consumption. Also, an ASIC design can be more scalable. i.e. to add power you can theoretically just gang together more ASIC chips.
A couple of years ago I bought a $130 graphics card to do GPU mining of Bitcoin at about 207 Mhash/sec. I pre-ordered the cheapest BFL for $150 last year that will do about 5 Ghash/sec (about 26x faster) just to give you some numbers to think about.
What happened was the hacker got into all of mtogx's accounts, looped through them and sold everything bringing the bitcoin value to $0.01 so he can bypass the $1000 daily withdraw limit ( $1000/0.01 is a lot of bitcoins he can transfer out). But i think mtgox shut everything down before he could transfer the bulk of the bitcoins out. Anyway lots of drama, i stick with tradehill.com.
