My general impression about mining is that right now it's a horrible idea to get involved in it as the necessary investment/expertise keeps increasing and there seems to be a problem where there's a big pipeline of already-paid-for ASICs which cannot justify their purchase cost but where the least lossy strategy is to run them and recoup as much of the loss as possible (which pushes up the difficulty massively and makes additional capital investments awful ideas). If one wants exposure, buying bitcoins seems like the best approach right now.

Here are some previous discussions of Bitcoin on LW. There doesn't seem to be a clear consensus.

Personally, I find this argument to be a compelling reason for optimism. I put a toy amount of money into bitcoin several months ago, and I am quite pleased with that experiment, and I'm considering putting some more money in.

Incidentally, does anyone know if there is a good prediction market site for bitcoins? I know of a few, but I've heard bad things about them.

Bitcoin is not an investment at all - Currency is a medium of exchange, not capital equipment, and a currency which consumes real resources to create (in this case, computation) represents a complete misunderstanding of what money is for, and is also inherently worse for the economy than a fiat currency. Because all resources diverted to the production of coin are taken from the real economy, making everyone poorer than they have to be. It is possible to make money separating fools from their wealth in this market, but doing so is a negative sum game overall - you are actively making the world worse when trading in bitcoins - and since there is no underlying real value being produced here at all, winning at this market is 100% a game of predicting the psychology of the crowd. Which means loosing your shirt is very easy, no matter how clever you are.

So basically, invest in something else. Nearly anything else. Playing poker would have greater net social utility because at least that has some entertainment value to the players.

For bitcoin being an efficient online currency, the transaction fees make it impractical. Ripple provides a much better way of doing micropayments.

If one would want to build a way to make a router provide payed access to anyone who comes along, Ripple is a better technology. The same goes for renting VPN on demand and similar tasks.

It much easier to imagine that some third world country shifts from using prepayed mobile cards for distant currency transfers to using Ripple than that they shift to using bitcoins.

Ripple allows an entity in the country to play bank and issue currency. That means that a village in Africa where everyone has a smart phone could just decide that the village government issues currency and demands that taxes get payed in that currency. The village can issue enough currency that the whole economy of the village runs in the currency.

On the other hand a village in Africa can't simply switch to bitcoin, because they would have to buy them expensively and they don't have money to do so.

Ripple also has the advantage of payments clearing much faster than bitcoin payments

Ripple allows to make payments in Dollar or in Euro if you want to do so without having any risk of fluctuating exchange risks that you have with bitcoin.

Maybe another process will even improve on Ripple but I think Ripple is superior to bitcoin for most purposes, so Bitcoin won't stand a chance over the long run.

Ripple has also the advantage that it has a business model that can pay for developers so I would expect it to get more development hours than bitcoin.

I have not seen a significant LW consensus.

My view is that it is unreasonable to expect one can time the market effectively, and so one should invest in Bitcoin based on the long term prospects, which are either $0 per coin or hundreds of thousands / a million per coin, in which case the probability of hitting the upper end is the primary factor of interest.

Unfortunately, my estimate of the probability that it'll take off is roughly linear in the price, which means I don't consider price shifts very informative, which means it's always a hard decision to be in or out.