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Comment by nivertech | Hacker News Reader

I have much simpler explanation why miners should be regulated as Money Transmitters than the one described in the article.

Thinking from the first principles: what PoW, if not an obfuscated way to buy tokens/coins? I.e. you exchange money for electricity, then electricity for compute power, then computer power for a right to play a lottery, then periodically you win tokens/coins.

Money bag → High voltage sign → Personal computer → Slot machine → Coin

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I think you provided the right framework for thinking about this question. I would say that the miners are making bitcoin using raw materials, including electricity and computers, as inputs to a process. The miners are producing or issuing bitcoin, rather than buying it or finding it. Even if electricity is provided/given to a miner with the expectation of bitcoin in return, I believe they are working together in a common enterprise for profit, rather than the miner conducting money transmission.

I would've agreed if their end goal was to build a non-financial entries on a ledger.

But in case of Bitcoin they're doing it with the expectation of trading these ledger entries (UTXOs) on the secondary markets.

That's what makes them money surrogates / money substitute.

Zooming out a bit, I do agree that bitcoin is set up as a fiat money transfer system and that in order for the miners to keep making bitcoin they do need to sell it to people to make a profit, so I can't just narrow in on the production of bitcoin and ignore where profits come from. When the miners sell the bitcoin they make for dollars as a business, that is money transmission. Gold dealers are money transmitters because they sell gold (considered a currency equivalent) for dollars as a business. Gold mining companies invest to find gold as a company, when they sell the commodity for dollars for a profit I'm not sure if this is money transmission because gold is a real commodity that as consuming demand, bitcoin isn't a real commodity because it isn't 'used' so I don't think the bitcoin miners have the same benefit of selling bitcoin for dollars without being money transmitters. Bitcoin miners should be thought of as gold dealers, but also as a common enterprise issuing securities.

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