Remember when we posted about the Live Traffic feature in Google Maps going “live” in Canada? This feature is pretty darn awesome, and many people have been wondering how the service actually works to find all the busy hot spots.

The answer is quite simple, according to the Official Google Blog. Google wrote about this feature near the end of August, but at the time it was just being rolled out in the USA. Here’s how the Live Traffic feature tracks which roads are busy and which aren’t:

If you use Google Maps for mobile with GPS enabled on your phone, that’s exactly what you can do. When you choose to enable Google Maps with My Location, your phone sends anonymous bits of data back to Google describing how fast you’re moving. When we combine your speed with the speed of other phones on the road, across thousands of phones moving around a city at any given time, we can get a pretty good picture of live traffic conditions.

We continuously combine this data and send it back to you for free in the Google Maps traffic layers. It takes almost zero effort on your part — just turn on Google Maps for mobile before starting your car — and the more people that participate, the better the resulting traffic reports get for everybody.

Eureka! That’s ingenious really. This phenomenon, known as “crowdsourcing” has been around ever since GPS devices have been introduced into the marketplace. However, it was Google who was able to make it useful by harnessing the massive scale of mobile users and their locations.

How? They made it possible by making Google Maps for mobile phones a free and easy download. This, combined with the millions of iPhone users utilizing Google Maps makes it easy to tell which streets are busy and which aren’t. When I’m zooming around town I always use Google Maps to find places or to track my current location. I guess I’m just doing my part to help fuel the “live traffic” feature!

Here’s a first hand account of the new Live Traffic feature actually being useful and accurate, according to avid iPhoneinCanada.ca reader Mr. Speedy:

Works pretty good. I drove to a red area yesterday afternoon in Montreal. Upon entering the “red” zone, I said to myself “That thing doesn’t work” as I wasn’t seeing any sign of slow downs, but a few hundred meters later… traffic had slowed down to a crawl! So the red zone began a little too soon on the phone, but the status was pretty accurate. I am impressed. They say it works by calculating other cellphone user’s speed. Nice.

Thanks to Mr. Speedy for the blog link!