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Comment by jrochkind1 | Hacker News Reader

The speculation has created a LOT more attention from bitcoin; it's possible speculation is the majority of bitcoin use, in which case hardly anyone would be paying attention to bitcoin without it. Which might be just fine, of course, it's just another thing the speculation has done for bitcoin.

I think the interesting thing the article points out is that bitcoin mining itself is inherently a form of speculation though -- you are counting on the value of the bitcoins you mine being at least as high as the money you had to expend to mine the bitcoins (hardwar, power, network access), or mining is a losing proposition.

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The problem is that speculation created a lot of attention for Bitcoin as a get-rich-quick scheme, not as an actual utility.

And that's not necessarily true. It assumes that everyone mines bitcoin for the purpose of obtaining bitcoin, not to support the network.

> And that's not necessarily true. It assumes that everyone mines bitcoin for the purpose of obtaining bitcoin, not to support the network.

Like someone is intentionally donating money in hardware and electricity in order to support the project? How many dollars a month would you personally spend to do this? Maybe there's some rich people involved who have the money to spare? At the current cost of mining, how many dollars a month are are required to keep the economy going (I have no idea), and would it be possible to get that much as "charity" donations to support the bitcoin project (I have no idea either)?

If the Bitcoin network is valuable to someone, they would likely invest to keep it running and secure. I would be more than willing to pay to run my mining equipment (bought with previously-mined bitcoins, about $1/day to run) to keep the network up.

Speculation has driven the cost of mining way up, but the speculation isn't inherent to mining. If the network was run entirely on a "charity" basis, the costs to mine would be much, much lower.

If Bitcoin is actually a speculative lottery that was advertised as a payment system, that seems a bit ethically dubious.

Mining bitcoin is a speculative lottery. The bitcoins actually be transferred around were given originally to those who won that lottery, but after that, they're just traded like money. In the future, the winnings from the lottery is a percentage of each transaction instead of bitcoins, but that's relatively a long ways away. Basically, with each transaction, a person posts what percentage of the transaction goes to the winner, and the winner chooses which transactions to honor onto the blockchain. The giving out of synthetic bitcoins is a way to bootstrap this process and to make sure that there's no single point of ownership.

To be clear, the speculative lottery that I was talking about is the BTC-USD daytrading on the exchanges. A significant fraction of that speculation is due to press hype that is due to rapid price spikes caused by earlier speculation.

Mining involves some speculation about future difficulty and future exchange rates (since you have to pay for electricity in real money), but at least there are some fundamentals that you can build a model around. With simple calculations (that ignored transaction fees BTW) I was able to correctly predict when mining would and would not be profitable and mine accordingly.

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