It's been fun watching Bitcoin as a whole and especially watching financial folks try to wrap their brains around Bitcoin, its price and seeing them try to define exactly "what it is". Even my in-laws are investing a small amount in Bitcoin and Litecoin ... the two of them have a Verizon Wireless internet connection and a computer from 2004 -- read: not technically savvy in the least.

As someone who's done about 20 years worth of investing in stocks and mutual funds and has a very low tolerance for gambling[0], I wouldn't dream of investing in Bitcoin. Last year, however, I did mine Ethereum. The result of that mining turned out quite well for me, costing a little in electricity[1]. I further rationalized it by the fact that I could put the video cards I purchased to work for me in other ways -- I might not have purchased the card that I did were I not targeting price/watt in mining, but the cards I purchased were slightly better than the ones I would have and I'm very happy with them for rendering and some of the fun I'm having playing with ML using CUDA, and hey my ffmpeg transcodes are quite fast, too! I jumped on ETH mainly because of the fact that I had played with Bitcoin in the early days and managed to mine about 20 of them which I lost due to reloading a server[2] and not caring about my USD$0.25 worth of BTC[3].

All of that aside, I don't mine any longer -- the difficulty is too high and with my setup, the best I can hope for is to get a couple of Ether a year. I started mining ETH because they were doing something different from BTC and I had the sense that the price would go up (though, again, didn't expect it to hit $475 as it has today). The thing of it is -- nobody can answer the question "why" in a way that makes me comfortable. It's, effectively, a bet that someone elses' imagination will feel that the price of these bits are worth more than they are now. While I've gotten the sense that a lot of investing works this way, at least from time to time it appears to track with real-world things, like earnings and the state of the overall economic sector that the company is a part of.

I think at least some of the price movement has to do with the fact that Bitcoin is wildly unregulated (and I believe when the inevitable hammer of government steps in, that price won't soar or remain as high). The fact that my in-laws have money in the game (though, for practical purposes, it's pocket change) tells me the days of free-wheeling non-regulation are very numbered, though I have a hard time figuring out how you even regulate something like this (particularly a product like ZCash). And the worst of it is that from a regulatory standpoint, it'd be easy to argue that a lot of the transactions taking place look a whole lot more like money laundering and a whole lot less like "a digital equivalent to cash[4]". The fact is, the treasury components of our governments love that we hate carrying around pieces of easily lost paper and prefer to use regulated intermediaries that helpfully provide reports to them about our incomes and spending habits which can be used to ensure we're operating according to the law. The numbers of traditionally "Cash Only" businesses are approaching zero which is starting to put any transaction that doesn't involve one of these regulated entities into the "questionable" category.

I'm fascinated by all of this, personally. It's mostly played out as I have expected -- when the value of BTC started exploding, the numbers of cryptocurrency and cryptocurrency related products started exploding as did the number of thefts, viruses/criminal elements specifically attacking or using cryptocurrencies. And, of course, the scammy-sounding me-too start-ups trying to find some way to use buzzwords from the cryptocurrency space (though the "ICO"s surprised me quite a bit both in the sheer number of them and the number of people willing to buy into them). Most of the off-shoot cryptocurrencies were nearly identical to one of the leading products with ZEC and ETH being outliers with unique features and spawning their own copy-cats (I'm also watching PIRL with curiosity[5] since it seems centered on improving transaction speeds, more stability around management/updates and focused early on getting an actual marketplace up -- plus, it's based on ETH, which I find very interesting as a technology).

[0] I brought $20 to Las Vegas with the full intent of losing it. It took four days for that to happen and I still felt badly about having wasted it despite it providing me with several hours of entertainment across a variety of video poker machines.

[1] As a guy who has three servers running in his basement and likes to keep the air conditioning set at a frigid 68 degrees, the difference between my already outrageous electric bill and my slightly more outrageous electric bill wasn't something my budget noticed. The servers were mostly idle, anyway, so why not have them doing something while they're not doing anything?

[2] I found the technology interesting and mined more as an academic experience. I don't remember the exact date, but it was within a few months of when the network went live ... I didn't even use a pool and managed to net somewhere around 20-25 of them in a couple of months. I loved the "idea" but wrote it all off as a cypherpunk's wet dream, not something that would actually have value in the future. Oops!

[3] IIRC, there wasn't even a way to see the price of BTC in USD because the only way to turn them into cash was to find someone who wanted to buy them from you.

[4] As in, similar anonymity and similar risk -- you lose or have your wallet stolen, your cash is also lost. Unfortunately, people won't see it that way when it's their money.

[5] I even ended up firing up my mining rig, though that was mostly because I was feeling the itch to delve into CUDA, again, so I took some time to add some optimizations to the mining code I had tweaked last year. I don't expect to make money from it, just I like didn't expect to do so for ETH, but I'm enjoying playing around with code and technologies that I don't normally get exposure to in my day job.