Is bitcoin a form of gambling?

[melvster]

In traditional slots you pay a coin, and if a certain sequence comes up, you get some winnings.  I think everyone will agree that's a form of gambling.

In bitcoin, to create coins, you pay some electricity, and if a sequence of 0's comes up, you win some bitcoins.

Is this aspect a form of gambling?

And if so, is that illegal in the U.S.?

[solex]

No bet means no gamble.

When mining bitcoins there is no bet or stake. Instead, a mathematical problem is solved and this earns a monetary reward.

[Kazimir]

It's not gambling because you can simply calculate the outcome yourself. There is no chance or gambling or betting or luck factor involved whatsoever. Completely different from slot machines in casinos.

But it's the actual calculation you're paying electricity for.

And what is legal or illegal in the U.S. doesn't matter, because Bitcoin is not related to the U.S. in any way. It would be just as relevant as asking if it's illegal in Iran or North Korea. It might be, but nobody cares

[nbartlett]

You "pay" some effort to dig in the ground. If a nugget of gold comes up, you win that gold. Therefore, mining is illegal in the US.

... and nobody gives a damn ;-)

[Gabi]

Yes it is illegal, sure 

[BitAddict]

This is 100% gambling ATM.

But if you invest is always gambling... more or less, but gambling.

[Eastwind]

It depends on the definition of gambling. The outcome of mining bitcoin is definite in long term.

[franky1]

In traditional slots you pay a coin, and if a certain sequence comes up, you get some winnings.  I think everyone will agree that's a form of gambling.

In bitcoin, to create coins, you pay some electricity, and if a sequence of 0's comes up, you win some bitcoins.

Is this aspect a form of gambling?

And if so, is that illegal in the U.S.?

just like FIAT

if you work in a factory and have a set target of products to create, if you reach the magic number you see a nice jackpot on your wage slip. if you dont reach the magic number, expect to work saturdays.

then you go to buy car fuel and try searching for the best place to get the best price fuel. gambling you get to the cheapest fuel station in your town before the car's fuel tank empties.

now your car is fuelled up, do you gamble going home to your wife who may or may not be sat there waiting to trade you your wage slip for the household bills. or do you gamble spending the wages on a few pints in a bar.

everything is a gamble these days

[Rannasha]

Mining is gambling in a way. Computing a hash is not so different from drawing a random number and the whole idea behind mining is to keep computing hashes until you hit a result with the right properties. This is essentially a luck-based process. Electricity is your bet, a block is the prize.

As with all random processes, the larger the sample size is, the smaller the relative variance. So a large pool mining together has a lower variance in its block-finding-rate than a solo miner with a small rig. But even a large pool that hits several blocks per day on average can hit a dry spell and not find any for days or go on a lucky streak and find multiple blocks in one hour.

[nameface]

"Gambling is the wagering of money or something of material value (referred to as "the stakes") on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Gambling thus requires three elements be present: consideration, chance and prize." - wikipedia

Paying 10k for an ASIC and solo mining = gambling. The purchase of equipment and electricity is "the stakes", and mining a block is the intended uncertain outcome.
However, the use of mining pools removes the element of chance. Gaining a steady income from supporting a payment network =/= gambling.

[Bitware]

In traditional slots you pay a coin, and if a certain sequence comes up, you get some winnings.  I think everyone will agree that's a form of gambling.

In bitcoin, to create coins, you pay some electricity, and if a sequence of 0's comes up, you win some bitcoins.

Is this aspect a form of gambling?

And if so, is that illegal in the U.S.?

Ask the same question on Wall Street.

[Svennisen]

Name any investment that isn't a form of gambling? Will you ever be 100% sure that you will get your invested money back?



Allright, there exists some government bonds, but they don't really count

[johnyj]

In traditional slots you pay a coin, and if a certain sequence comes up, you get some winnings.  I think everyone will agree that's a form of gambling.

In bitcoin, to create coins, you pay some electricity, and if a sequence of 0's comes up, you win some bitcoins.

Is this aspect a form of gambling?

And if so, is that illegal in the U.S.?

No, if you repeat the process in gambling, what you put in will be less than what you get out in the long run, that's the reason gambling is regarded as a non-productive activity and is prohibited in some country

But bitcoin's payout is constant, if you decide wisely, what you mined out usually value more than what you put in, the common sense is 3 month's ROI

[doom309]

bitcoin is not gambling, its highly speculative investment at present, if you take some of your bitcoins and bet on the horses or dogs on one of the bitcoin betting sites, thats gambling - but so what

its usually as simple as this, if govts dont tax it, or dont seek to tax it (or look like they might want to try and tax it), then its gambling, because govts think gamblers are stupid and lose more than they ever win

if govts do tax it, or want to or try to etc, its not gambling, they see it as investment income, business income, capital gain etc, and want their slice of the pie when it comes out the oven !!

[Bitware]

bitcoin is not gambling, its highly speculative investment at present

Those are the same things. Investments can go down and even to zero. You realize that dont you? That's why everyone says its a gamble, because its gambling.

Question is the odds.

[raze]

If so, then you'd better turn off your PC right now, those calculations it's doing could have the authorities come knocking.

Also, make sure you don't go outside, it's dangerous out there, and you're betting your life that something bad won't happen. On that note, try not to eat anything as it might be harbouring dangerous bacteria which could kill you.

[angelafairie]

It is not just gambling. It has more strategy involved in it, just like other currency exchange or stock market.

[Kluge]

if you work in a factory and have a set target of products to create, if you reach the magic number you see a nice jackpot on your wage slip. if you dont reach the magic number, expect to work saturdays.

You have it backwards.  Workers are generally paid the same per hour whether they're productive or not. If they fail, they get overtime on Saturdays and double-time on Sundays. Factory management gets around the inherent moral hazard of that scheme by having employees work upward of 70 hours on the average week and providing the legal minimum of days off, where employees'd do just about anything to get out of working weekends without needing to pay what's deserved, because the employees literally feel they're being paid by not being paid.

@ OP, if mining is gambling, electricity providers are most culpable, since they are effectively the provider of plays in the mathematical lottery. They take the money, and if the player wins, he continues buying more plays until he busts (or cashes out). If you're actually looking for a serious answer, there are plenty of legal resources for any country over a few dozen citizens in size. Mining isn't gambling in the US, for example, which could be found with about 5 minutes on Google. Well... unless you can't get a dozen tax lawyers to agree on how to file taxes as a miner, but I'm sure every Bitcoin miner has spent thousands to figure out how to report hundreds a year in temporary income.

[luv2drnkbr]

Everything is a gamble.  When you go drive somewhere, you take the risk of being struck and dying, but the payoff of going out and accomplishing your task is high enough, that combined with the very low probability of death, you view the gamble as worth while.  All life is analyzing risk and reward, and that is all that gambling is.

[CanadianGuy]

by holding onto fiat currency, you are gambling as well.  It could go up or down.