Quote from: TellerOfTruth on February 20, 2015, 08:05:52 PM

Quote from: AgentofCoin on February 20, 2015, 07:52:36 PM

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?