There is an economics dissertation in here, somewhere

[jducoeur]

I call your attention to this article in TechCrunch a few days ago, about a company that has built a cloud-hosted supercomputer system for mining Bitcoins.

Ponder that for a second. This is a company that is more or less literally renting machines that print money. My head breaks a little when I try to wrap it around the weird economic recursion in that. And I'm trying to find a reason why it makes sense to rent out such a system, instead of just running it on your own account. I have a suspicion that the owners of the system are essentially using it to hedge currency fluctuations, and that most users of this cloud are taking on more risks than they properly understand...

Comments

[dsrtao]

Why does anyone offer stock tips? If they had confidence in their knowledge of the market, they would make the bet themselves and not share it (unless part of their strategy is to move the price through telling everyone about it on national media).

Of course, if they actually believed their hype, they might get caught in the Butterfly Labs trap. (They manufactured specialist bitcoin mining computers, but ran them for a while before delivering them. Eventually they stopped making shipments, but they were still charging customers...)