> all of these smart people with smart computers are crunching numbers on a frivolous exercise and not for something productive. total deadweight loss That's t

> all of these smart people with smart computers are crunching numbers on a frivolous exercise and not for something productive. total deadweight loss That's true of gold mining as well, insofar as the price of gold is significantly higher due to speculation and its use as a currency and store of value than it would just for industrial uses (see comparisons to ruthenium). This increase in price drives a whole lot of mining that wouldn't otherwise occur. But the whole reason for allowing Bitcoin "mining," I think, is because it provides an incentive to early adopters, solving what would otherwise be a chicken-and-egg problem that might be extremely difficult. Other digital currencies (e.g. Flooz) used various marketing gimmicks to spur adoption, but Bitcoin's method is much cheaper.