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Author Topic: Four Strikes Against Bitcoin  (Read 4103 times)
TellerOfTruth
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February 20, 2015, 08:05:52 PM
 #21

Here is the original intent from the Whitepaper, as to your "Prize" argument.

"6. Incentive
By convention, the first transaction in a block is a special transaction that starts a new coin owned
by the creator of the block. This adds an incentive for nodes to support the network, and provides
a way to initially distribute coins into circulation
, since there is no central authority to issue them.
The steady addition of a constant of amount of new coins is analogous to gold miners expending
resources to add gold to circulation
. In our case, it is CPU time and electricity that is expended.
The incentive can also be funded with transaction fees. If the output value of a transaction is
less than its input value, the difference is a transaction fee that is added to the incentive value of
the block containing the transaction. Once a predetermined number of coins have entered
circulation, the incentive can transition entirely to transaction fees and be completely inflation
free.
The incentive may help encourage nodes to stay honest. If a greedy attacker is able to
assemble more CPU power than all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate new coins. He ought to
find it more profitable to play by the rules, such rules that favour him with more new coins than
everyone else combined, than to undermine the system and the validity of his own wealth."
https://bitcoin.org/bitcoin.pdf


It is a means to secure the network. Not a "prize" or "reward" and that is the end game.
In a lottery, the " "prize" or "reward" is the point. Its a game of chance.
Bitcoin isn't a game of chance, but intended to be a payment network that is still in its early stages.
You are misconstruing Bitcoins intent and objective, in order to fit into gaming law.


I agree the intent and objective of mining is to secure the network.  However, you can have noble intent and objective and still be in violation of the law by your choice of method to achieve your objective.  

If you secure the blockchain with the efforts of volunteers who personally pay for a small number of very cheap Raspberry Pi 2 computers that do block crypto computing, and personally receive nothing in return for providing that service other than a civic sense of participation, then you are meeting the law because you are not providing a "prize".

If you offer 50 / 25 / whatever bitcoins every ten minutes that are ultimately intended to be sold off and pay for $350 million in infrastructure, $550 million per year in electricity, and a huge ASIC mining arms race, then you are providing a "prize".  If that prize is distributed by "chance" (ie, your block has X leading zeros, congrats!) then you are running a lottery and you are in violation of US State gaming laws.

Intent and objective are not relevant here, prize is.  Only if miners mine for free without receiving a prize via chance will they be legal.  
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February 20, 2015, 08:11:31 PM
 #22

You have to understand that the U.S, is not the WORLD. Miners will move out of the US and go elsewhere if what you say is actually true. 
Stick your head out of your small intestine you filthy scum. (Let me guess, you're a lawyer)

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February 20, 2015, 08:15:39 PM
 #23

If you don't have to pay to get in then it's not a lottery. I suppose you could call it a contest, but there is nothing wagered like a lottery. I doubt any court would find otherwise.

You do not understand the legal definition of "consideration" in this context.  You have to pay  to buy the mining computer, and electricity to run it, which is your entry fee or "consideration" for the Bitcoin lottery.  The value of that entry fee flows to "Bitcoin" as operator of the lottery when you calculate a block to be added to its blockchain - a service vital to the continuation of Bitcoin.  If Bitcoin used every single block generated by all miners, it would be "buying" a "service" and would be a business.  Instead, a random chance function (leading zeros in the block) is used to award a prize to one single block winner every ten minutes.  All other blocks generated by all other losers (which are cryptographically valid but lack the winning zeros) are discarded.  

I know it's uncomfortable to acknowledge that Bitcoin mining is a lottery, but legally it is.  Protests to the contrary, or silence so far this point from State law enforcement or courts, are irrelevant.   Favorable federal legal rulings so far from IRS or DOJ are also irrelevant, since gaming law is handled on a State level.

So far the States have yet to be heard on this point of law - Bitcoin as an illegal lottery.  It will not be a good day for Bitcoin when they do.

I'm not a lawyer, but I think even I could win that argument. Heck, I found this definition in your own link: "Consideration may include a fee, a product purchase requirement, or the requirement that the entrant expend extensive time or effort."

None of the costs you mention could ever be claimed to be a fee for participation in a lottery,IMO. If I enter a free raffle at the church I can't claim that since I had to pay bus fare or buy shoes to get to the church It's gambling. Besides, I do not have to buy a computer to mine, I could have used my game PC. Perhaps electricity is part of my rent? There is no one compelling me to spend a penny and bitcoin is not a legal entity or company.

For me the strongest argument is that you are the only person making this claim. No court has said anything like this nor is there a president you point too. I have spoken to multiple accountants with experience in crypt-currency and never even heard of this?  

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AgentofCoin
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February 20, 2015, 08:17:09 PM
 #24

Here is the original intent from the Whitepaper, as to your "Prize" argument.

"6. Incentive
By convention, the first transaction in a block is a special transaction that starts a new coin owned
by the creator of the block. This adds an incentive for nodes to support the network, and provides
a way to initially distribute coins into circulation
, since there is no central authority to issue them.
The steady addition of a constant of amount of new coins is analogous to gold miners expending
resources to add gold to circulation
. In our case, it is CPU time and electricity that is expended.
The incentive can also be funded with transaction fees. If the output value of a transaction is
less than its input value, the difference is a transaction fee that is added to the incentive value of
the block containing the transaction. Once a predetermined number of coins have entered
circulation, the incentive can transition entirely to transaction fees and be completely inflation
free.
The incentive may help encourage nodes to stay honest. If a greedy attacker is able to
assemble more CPU power than all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate new coins. He ought to
find it more profitable to play by the rules, such rules that favour him with more new coins than
everyone else combined, than to undermine the system and the validity of his own wealth."
https://bitcoin.org/bitcoin.pdf


It is a means to secure the network. Not a "prize" or "reward" and that is the end game.
In a lottery, the " "prize" or "reward" is the point. Its a game of chance.
Bitcoin isn't a game of chance, but intended to be a payment network that is still in its early stages.
You are misconstruing Bitcoins intent and objective, in order to fit into gaming law.


I agree the intent and objective of mining is to secure the network.  However, you can have noble intent and objective and still be in violation of the law by your choice of method to achieve your objective.  

If you secure the blockchain with the efforts of volunteers who personally pay for a small number of very cheap Raspberry Pi 2 computers that do block crypto computing, and personally receive nothing in return for providing that service other than a civic sense of participation, then you are meeting the law because you are not providing a "prize".

If you offer 50 / 25 / whatever bitcoins every ten minutes that are ultimately intended to be sold off and pay for $350 million in infrastructure, $550 million per year in electricity, and a huge ASIC mining arms race, then you are providing a "prize".  If that prize is distributed by "chance" (ie, your block has X leading zeros, congrats!) then you are running a lottery and you are in violation of US State gaming laws.

Intent and objective are not relevant here, prize is.  Only if miners mine for free without receiving a prize via chance will they be legal.  

Under US law, Intent comes first.
It is either a new technology, that uses incentive to secure the network.
Or
It is a lottery, that hides behind a guise of new technology.

US Banks are conducting a lottery under your interpretation of law. They receive interest as a prize for payment processing.

The real argument is Consideration.

In legal theory, "Consideration" does not apply since no one is purchasing from the one running this lottery.
You are saying that buying computers and parts and electricity, the electric company and Dell are facilitating the games?  

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TellerOfTruth
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February 20, 2015, 08:18:11 PM
 #25

you have to understand the U.S is not the WORLD. Miners will move out of the US and go elsewhere
stick your head out of your small intestine you scum. (you must be a lawyer)


US law can and does confiscate money generated in violation of its laws elsewhere in the world.  Just ask online poker players.  

Mainstream acceptance of Bitcoin in the US economy (especially by vendors and businesses) will be hamstrung by this fact as it becomes more widely realized.

Every government in the world taxes gaming, which is why there are gaming control laws in the first place.  

Why am I scum for pointing out the law where it is currently being ignored?  Am I scum for pointing out that you cannot legally murder me to shut me up?

Open your mind to things you don't want to hear.  It can be a very educational experience.
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February 20, 2015, 08:26:44 PM
 #26

Telleroftruth... what's your reason for being here?
What's in it for you to talk down bitcoin?
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February 20, 2015, 08:27:09 PM
 #27

1. Bitcoin mining is a service not a lottery. Miners work for a living.

Actually, the "service" that miners "do" is legally considered to be the "consideration" part of the lottery known as Bitcoin.

Bottom line, it is working and continues to grow.

Something that has consumed hundreds of millions of dollars on hundreds of thousands of useless computers only to lose 75% of its value in the past 15 months is not "working" or "growing".  It's a burst bubble.

If you don't have to pay to get in then it's not a lottery. I suppose you could call it a contest, but there is nothing wagered like a lottery. I doubt any court would find otherwise.

As far as the "burst bubble", I think this is a common confusion about bitcoin. People often seem to think in terms of stocks and investments when thinking about bitcoin. But it is nothing like that. I have made some good money in bond markets and trading stocks. Each trade is really a bet on the business behind the stock offering. Those companies need my money to launch a plan to make more money. That's my return. If they fail to raise enough the price could drop and the company could become insolvent and POP! the bubble bursts and the stock is worthless.

Bitcoin is not a business, there are no mouths to feed, bitcoin does not need money to work. It worked just fine when the price was $0.06, it worked fine when the price was $1000. There is no minimal threshold that is required to keep bitcoin from becoming insolvent.

In short, price is not an indicator of growth. Price is an indicator of supply and demand, adoption shows growth. There are more businesses now than ever accepting bitcoin and the list grows every day. I'm shocked by how quickly it's all happening. Two years ago I could buy alpaca socks and used computer parts with bitcoin. Now I buy whatever I want and no longer use cards on the internet.

~Cheers

Really? Where do you live that you can pay rent or your mortage in Bitcoin?

As for the topic at hand. I think that yes, he does have some credit to his argument. However, you could make the claim that Bitcoin DOES operate like stock in a company (that seems to be how many people use it in trade), but that the company is a decentralized network. Thus the concept of the DAC. And as we all know, the stock market in and of itself is very much like a gaming set up. What draws the difference between the two?
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February 20, 2015, 08:27:45 PM
 #28

US Banks are conducting a lottery under your interpretation of law. They receive interest as a prize for payment processing.

Incorrect.  I agree that banks do receive interest as a fee or "prize" for payment processing.  However, they do not randomly select who gets payment processing and who does not - there is no "chance" selection of customers.  Everybody who submits a request for payment gets equal service.  No element of "chance", no lottery.

The real argument is Consideration.  In legal theory, "Consideration" does not apply since no one is purchasing from the one running this lottery.

Incorrect.  Consideration is not about a "player" (mining) OBTAINING something of value from a "lottery runner" (Bitcoin).  Consideration is about the "lottery runner" (Bitcoin) RECEIVING something of value from the "player" (miner) - namely, the addition of a block to the blockchain from a single miner that it designates as a ten-minute "winner".

Thank you for thinking this through instead of just insulting me.  You will eventually conclude that legally I am right, as uncomfortable as that will be to admit.
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February 20, 2015, 08:35:32 PM
 #29

As for the topic at hand. I think that yes, he does have some credit to his argument.

Thank you.

However, you could make the claim that Bitcoin DOES operate like stock in a company (that seems to be how many people use it in trade), but that the company is a decentralized network. Thus the concept of the DAC. And as we all know, the stock market in and of itself is very much like a gaming set up. What draws the difference between the two?

A stock market is just a meeting place that charges a fee or rent for allowing two parties to meet and negotiate a legal contract to exchange two assets.  Nobody is excluded from the transaction by a "chance" element, and the exchange of two equal-values assets at the time of transfer is not the awarding of a "prize".  AFTER the transaction is concluded, SUBSEQUENT ELEMENTS determine if you made a good trade ("win" or "lose") - NOT your counterparty or your exchange.

Bitcoin is a lottery.  Stock markets are not a lottery.
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February 20, 2015, 08:39:37 PM
 #30

Really? Where do you live that you can pay rent or your mortage in Bitcoin?

As for the topic at hand. I think that yes, he does have some credit to his argument. However, you could make the claim that Bitcoin DOES operate like stock in a company (that seems to be how many people use it in trade), but that the company is a decentralized network. Thus the concept of the DAC. And as we all know, the stock market in and of itself is very much like a gaming set up. What draws the difference between the two?

I collect rent, I don't pay it.  Wink

But I don't see how it is like a stock just because a lot of people treat it like one. Can you buy BTC at a stock market? No because it is not a stock, nor does it have the legal properties of a stock such as an issuer. ; nor is it called a stock by any legal entity; nor can a decentralized network be called to testify.
 If you collect stamps you may buy and sell and follow the market prices, but they are stamps none the less. You are stamp collector even if you fancy yourself a "postage stock trading expert".

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February 20, 2015, 08:47:30 PM
 #31

US Banks are conducting a lottery under your interpretation of law. They receive interest as a prize for payment processing.

Incorrect.  I agree that banks do receive interest as a fee or "prize" for payment processing.  However, they do not randomly select who gets payment processing and who does not - there is no "chance" selection of customers.  Everybody who submits a request for payment gets equal service.  No element of "chance", no lottery.

The real argument is Consideration.  In legal theory, "Consideration" does not apply since no one is purchasing from the one running this lottery.

Incorrect.  Consideration is not about a "player" (mining) OBTAINING something of value from a "lottery runner" (Bitcoin).  Consideration is about the "lottery runner" (Bitcoin) RECEIVING something of value from the "player" (miner) - namely, the addition of a block to the blockchain from a single miner that it designates as a ten-minute "winner".

Thank you for thinking this through instead of just insulting me.  You will eventually conclude that legally I am right, as uncomfortable as that will be to admit.

You have to purchase something from the lottery runner, to participate in that lottery. That is what "Consideration" is.
It is under Contract Law. It is an agreement, or proof that you are participating in the lottery.

If you are now saying that when a miner makes an "addition of a block to the blockchain (from a single miner) that it designates (it) as a ten-minute "winner". and as a result, gains a "prize" from the network, then when did the miner pay the entrance fee into that lottery?

You are saying that as soon as the Miner "finds a block", its Consideration.

So, an unsuccessful Miner is mining, equals no lottery, since there is no consideration.
But when a Miner "finds a block", and gets a "prize", finding the block is the consideration?
So in theory, only the miner who finds the block is playing a lottery by himself, and pays himself.

Who is running this lottery?
The Miner is paying himself and playing by himself, in your legal interpretation. That can not be a lottery.

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February 20, 2015, 08:53:17 PM
 #32

Here we go again. Another thread dedicated to FUD.  Smiley

That too from a newbie like everytime.
Yeah, like they had nothing better to do than jump into a bitcoin forum to try to scare people from btc... lol
Fortunately smart people reside here and see their puppet ways.... is this the "then they fight you" phase?
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February 20, 2015, 09:04:28 PM
 #33

I'm not a lawyer, but I think even I could win that argument. Heck, I found this definition in your own link: "Consideration may include a fee, a product purchase requirement, or the requirement that the entrant expend extensive time or effort."  None of the costs you mention could ever be claimed to be a fee for participation in a lottery, IMO.

Legally the Bitcoin miner entry requirement of owning or renting a computer to calculate trial crypto blocks constitutes "consideration".  You think a Monarch (or similar) running for 10 minutes and generating 700,000,000,000 * 60 * 10 = 42 trillion perfectly valid crypto blocks that get dumped just for not having an arbitrary pattern of X leading zeros isn't a requirement that the entrant expend extensive time or effort?

If I enter a free raffle at the church ...   bitcoin is not a legal entity or company...

Legally irrelevant.

There is no one compelling me to spend a penny....

Agreed.  But you are aware that the Bitcoin "system" offers a "prize" for participation as a miner and there is no way you can compete to generate a valid Bitcoin block and win that prize without spending money - equipment purchase, cloud rental, whatever.  As soon as you spend such money with the intent of generating the winning block in a ten-minute Bitcoin lottery, you have accepted the terms of the Bitcoin lottery of your own volition.  

For me the strongest argument is that you are the only person making this claim. No court has said anything like this nor is there a president you point too. I have spoken to multiple accountants with experience in crypt-currency and never even heard of this?  

Everybody hears of something the first time from somebody:

http://xkcd.com/1053/

Here's who's also hearing about this for the first time besides you:

http://www.naag.org/naag/attorneys-general/whos-my-ag.php
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February 20, 2015, 09:04:46 PM
 #34

US Banks are conducting a lottery under your interpretation of law. They receive interest as a prize for payment processing.

Incorrect.  I agree that banks do receive interest as a fee or "prize" for payment processing.  However, they do not randomly select who gets payment processing and who does not - there is no "chance" selection of customers.  Everybody who submits a request for payment gets equal service.  No element of "chance", no lottery.

The real argument is Consideration.  In legal theory, "Consideration" does not apply since no one is purchasing from the one running this lottery.

Incorrect.  Consideration is not about a "player" (mining) OBTAINING something of value from a "lottery runner" (Bitcoin).  Consideration is about the "lottery runner" (Bitcoin) RECEIVING something of value from the "player" (miner) - namely, the addition of a block to the blockchain from a single miner that it designates as a ten-minute "winner".

Thank you for thinking this through instead of just insulting me.  You will eventually conclude that legally I am right, as uncomfortable as that will be to admit.

ahhaha what a dumb fuck. Dont tell me you actually pass your bar exam. This is why most lawyers are only able to sign documents for money. Rarely they even understand what the fuck the law says, how its created ...
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February 20, 2015, 09:20:10 PM
 #35

I'm not a lawyer, but I think even I could win that argument. Heck, I found this definition in your own link: "Consideration may include a fee, a product purchase requirement, or the requirement that the entrant expend extensive time or effort."  None of the costs you mention could ever be claimed to be a fee for participation in a lottery, IMO.

Legally the Bitcoin miner entry requirement of owning or renting a computer to calculate trial crypto blocks constitutes "consideration".  You think a Monarch (or similar) running for 10 minutes and generating 700,000,000,000 * 60 * 10 = 42 trillion perfectly valid crypto blocks that get dumped just for not having an arbitrary pattern of X leading zeros isn't a requirement that the entrant expend extensive time or effort?

If I enter a free raffle at the church ...   bitcoin is not a legal entity or company...

Legally irrelevant.

There is no one compelling me to spend a penny....

Agreed.  But you are aware that the Bitcoin "system" offers a "prize" for participation as a miner and there is no way you can compete to generate a valid Bitcoin block and win that prize without spending money - equipment purchase, cloud rental, whatever.  As soon as you spend such money with the intent of generating the winning block in a ten-minute Bitcoin lottery, you have accepted the terms of the Bitcoin lottery of your own volition.  

For me the strongest argument is that you are the only person making this claim. No court has said anything like this nor is there a president you point too. I have spoken to multiple accountants with experience in crypt-currency and never even heard of this?  

Everybody hears of something the first time from somebody:

http://xkcd.com/1053/

Here's who's also hearing about this for the first time besides you:

http://www.naag.org/naag/attorneys-general/whos-my-ag.php
Hmm. I'm still not feeling it. The cartoon was kinda funny though. If the germane part is extensive time and effort it would be a huge stretch to apply it to mining. I have a friend who has mined thousands of BTC working about 1 hour per week. That's a lot less than I work for a lot less money. I would bet those laws were set up to go after contest scams. Something designed to get cheap labor under the guise of a contest. The thing about bitcoin is that there is no scammer. When you mine you work for yourself and none of your expenses go to bitcoin. They may go to the power company or Dell computers. But that is because you got power and a computer. No victim, no crooked contest business.

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February 20, 2015, 09:28:53 PM
 #36

you have to understand the U.S is not the WORLD. Miners will move out of the US and go elsewhere
stick your head out of your small intestine you scum. (you must be a lawyer)


US law can and does confiscate money generated in violation of its laws elsewhere in the world.  Just ask online poker players.  

Mainstream acceptance of Bitcoin in the US economy (especially by vendors and businesses) will be hamstrung by this fact as it becomes more widely realized.

Every government in the world taxes gaming, which is why there are gaming control laws in the first place.  

Why am I scum for pointing out the law where it is currently being ignored?  Am I scum for pointing out that you cannot legally murder me to shut me up?

Open your mind to things you don't want to hear.  It can be a very educational experience.

U.S. can and will excercise its laws within U.S. ground, but to charge the rest of the world for something in their law that the other country doesnt have in own laws is stupidity at its finest.
Mister, you are in wrong place if you want to discredit bitcoin, or its comunity, as you are on bitcoin forum. Its like a priest coming to a boys locker room, you just dont belong here im afraid.
Regarding laws that are being ignored, they may be ignored with a reason, they may need to be changed, or are we still burning witches at town square?


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February 20, 2015, 09:34:47 PM
 #37

Its funny to see a lawyer trying to use "law" as if its god's spell.

Being too stupid to understand the law aside, law is made by ppl from their currecnt understanding of matters.

Law once said, " no gay or lesbian on this earth" I guess that means we should jail every gay marriage then? No human evolves and so is their mind and understanding of universe.

Stupid lawyer can read books all day and try to pick words to make it sound like they're contributing to the world.

Smart lawyer however strike to see how the law is created and thus will challenge it if need to.
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February 20, 2015, 10:35:07 PM
 #38

You have to purchase something from the lottery runner, to participate in that lottery. That is what "Consideration" is.

Incorrect.  "Purchase" is most definitely not legally required and is not synonymous with "consideration".  See for example this legal definition (pg 3 at http://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Documents/pitguide_chapter_15.pdf:

"Consideration in this context means any valuable advantage or benefit that the person conducting a competition, contest of chance or lottery expects to realize as a result of conducting such competition, contest of chance or lottery. The term, therefore, may include, but is not limited to, bets or wagers of cash or property, making a purchase, being present at a drawing, giving a testimonial for a product of the donor of the prize, filling in an application or contest blank, following any rules; or expending time or personal effort." 

This legal definition includes expending time and personal effort and resources to come up with a crypto block that, when added to the Bitcoin blockchain, allows the multi-billion-dollar Bitcoin juggernaut to continue functioning for another ten minutes.


when did the miner pay the entrance fee into that lottery?

When he first spent money to acquire a computer and electricity / bandwidth to take a chance at calculating a "winning" crypto block.

You are saying that as soon as the Miner "finds a block", its Consideration.

Incorrect.  When a miner "finds a block", that's the moment he is awarded a "prize".   He gives "consideration" to the Bitcoin community BEFORE he finds a block and BEFORE he wins a prize by chance.

So, an unsuccessful Miner is mining, equals no lottery, since there is no consideration...But when a Miner "finds a block", and gets a "prize", finding the block is the consideration?

Incorrect.  The "consideration" is the computer purchase money and electricity the miner dedicates to trying to finding a block whether he succeeds or not.

Who is running this lottery?

Everybody who participates as a Bitcoin miner.  Bitcoin is a decentralized group consensus lottery that uses the internet to allow participation among consenting members.  That consent doesn't make it legal.
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February 20, 2015, 10:45:58 PM
 #39

"Extensive time and effort" would be a huge stretch to apply it to mining. I have a friend who has mined thousands of BTC working about 1 hour per week.

He spent hundreds / thousands of dollars to  buy that mining gear, and continues to pay significant electricity and bandwidth costs to apply it to mining.  Bitcoin benefits from his presence in its mining network.  This legally constitutes consideration.

I would bet those laws were set up to go after contest scams. Something designed to get cheap labor under the guise of a contest. The thing about bitcoin is that there is no scammer. When you mine you work for yourself and none of your expenses go to bitcoin. They may go to the power company or Dell computers. But that is because you got power and a computer. No victim, no crooked contest business.

Victimless crime is still crime.  Even tho everybody in a basement at an illegal poker game or in an alley throwing dice all agree to be there and accept the outcome of what happens, their activities still get raided by the police.  Why would a Bitcoin mining warehouse warrant an exemption for running its illegal lottery?
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February 20, 2015, 11:02:26 PM
 #40

You have to purchase something from the lottery runner, to participate in that lottery. That is what "Consideration" is.

Incorrect.  "Purchase" is most definitely not legally required and is not synonymous with "consideration".  See for example this legal definition (pg 3 at http://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Documents/pitguide_chapter_15.pdf:

"Consideration in this context means any valuable advantage or benefit that the person conducting a competition, contest of chance or lottery expects to realize as a result of conducting such competition, contest of chance or lottery. The term, therefore, may include, but is not limited to, bets or wagers of cash or property, making a purchase, being present at a drawing, giving a testimonial for a product of the donor of the prize, filling in an application or contest blank, following any rules; or expending time or personal effort." 

This legal definition includes expending time and personal effort and resources to come up with a crypto block that, when added to the Bitcoin blockchain, allows the multi-billion-dollar Bitcoin juggernaut to continue functioning for another ten minutes.


when did the miner pay the entrance fee into that lottery?

When he first spent money to acquire a computer and electricity / bandwidth to take a chance at calculating a "winning" crypto block.

You are saying that as soon as the Miner "finds a block", its Consideration.

Incorrect.  When a miner "finds a block", that's the moment he is awarded a "prize".   He gives "consideration" to the Bitcoin community BEFORE he finds a block and BEFORE he wins a prize by chance.

So, an unsuccessful Miner is mining, equals no lottery, since there is no consideration...But when a Miner "finds a block", and gets a "prize", finding the block is the consideration?

Incorrect.  The "consideration" is the computer purchase money and electricity the miner dedicates to trying to finding a block whether he succeeds or not.

Who is running this lottery?

Everybody who participates as a Bitcoin miner.  Bitcoin is a decentralized group consensus lottery that uses the internet to allow participation among consenting members.  That consent doesn't make it legal.


Your legal reasoning is bad faith interpretation, but the US Federal Government has been known to play those games.
Your definition and case law that you are citing is dated 1940, 1954, 1976. Those opinions and definition can not adequately answer many questions with new tech.
If a new technology, uses  "Game Theory", to make fair an (unfair) decentralized confirmation network, that does not make itself an illegal lottery.
But is using aspects of a lottery, or "Game Theory" to make the unfeasible (a nontrusted system becomes trustable through nontrust), thus feasible.

There is no caselaw or current US Rulings that would lead one to think the US Attorney General would claim Bitcoin mining is a lottery, thus illegal.
This is new law and only the Supreme Court of the US will be able to rule on this matter.
At the end of the day, if the US Government receives tax revenue from bitcoiners buy/selling bitcoin (like the IRS now mandates), why would they make parts of it illegal?

I support a decentralized & unregulatable ledger first, with safe scaling over time.
Request a signed message if you are associating with anyone claiming to be me.
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