Quote from: Adam on June 03, 2011, 08:34:14 PM

But does that serve any real purpose? If difficulty increases by 100x because of all the new miners does that help bitcoins as a unit of exchange?

Yes, it helps A LOT indeed. Right now it costs about 1$ to get 1BTC, and the $/BTC rate is about 13$. If difficulty increases by 100x it will mean that it will cost 100$ to get a BTC. And it's more or less established that difficulty follows price more than the other way around, so it will mean that, before difficulty increased 100x, $/BTC increased at least 100x.

Quote from: Adam on June 03, 2011, 08:34:14 PM

All that equipment is basically wasting power to do arbitrary calculations that only have value because of an artificial currency. I don't want to sound anti-bitcoin or anything, it's just that argument reminds me of when people saying government spending is good because it creates jobs without considering whether those jobs add anything of value to the economy.

In my way of thinking, you are creating bitcoins with electricity. Printing paper costs something. When difficulty and network total Thash/s rises, Bitcoin currency gets safer. You are spending more and more electricity in creating a more secure currency (in order to prevent double spending and all the like).