The following paper analyzes two distinct topics related to the virtual currency bitcoin. The first is an empirical test of purchasing power parity using volume weighted price data from bitcoin exchanges that facilitate transactions in U.S. dollars, euros, and British pounds. Evidence shows that relative purchasing power parity does indeed appear to hold, but that there is a persistent deviation from absolute purchasing power parity. The second topic is an analysis of bitcoin mining from an economic perspective. A simple model demonstrates that competition in bitcoin mining leads to a great deal of waste compared to the outcome that would be preferred by a central planner seeking to maximize welfare.