It’s no secret that bitcoin has hit a bit of a rough patch lately. The virtual currency has experienced a lawsuit, major theft, and a major exchange rate collapse, all within the last six months.

That’s why it’s all the more surprising that Draper Associates, the original wing of Silicon Valley venture capital giant Draper Fisher Jurvetson, has decided to invest $500,000 into a bitcoin-related startup: CoinLab.

The Seattle-based company said that it plans on using the money as a way to kickstart its business idea. CoinLab wants to use the bitcoin mining system as a means to generate revenue primarily for gaming companies.

Here’s how CoinLab’s model works: a gamer downloads a mining client for in-game currency (think Linden dollars, Wurm silver, WoW gold, FarmCash), similar to what any bitcoin user downloads as a way to gain virtual money. Then the software generates a certain number of bitcoins, which are changed into US dollars at current exchange rates. Next, CoinLab takes a cut of those real-world American dollars, as does the game company, which are then converted into the in-game currency.

"[We think] this will generate 50 times average revenue per user compared to advertisements," Peter Vessenes, CoinLab’s CEO, told Ars on Wednesday.

Vessenes added that the plan is to make all the steps in between the mining software and receiving in-game currency as seamless as possible. Gamers won’t need to know anything about Bitcoin; they’ll just have to run the client and then eventually will get a little boost in their gaming accounts.

Vessenes added that for now, the company has Wurm Online and graFighters "ready to go" when the service launches next month.

Still, not everyone is convinced that this is a good investment.

"Frankly, it makes no sense to me. But that doesn't mean its wrong, just that it makes no sense to me." wrote Ronald J. Mann, a law professor at Columbia University and an expert in payment systems, in a Wednesday e-mail sent to Ars. "The idea that they're going to get a VC-like return in bitcoin-based projects [is ludicrous]."

UPDATE: Joel Yarmon, of Draper Associates, wrote Ars on Friday to say: "The in-game revenue is a stepping stone: continue to build the business, trust, partnerships, etc. The greater idea of bitcoin is what attracted us to the investment: a decentralized monetary system backed by trusted parties, not venal governments, who want a secure and guaranteed way to settle remittances. You’ve probably seen an uptick in the value of art auctioned at Sotheby’s and Christy’s, and Utah just passing a law legalizing the settling of remittances in gold and silver. Folks are searching for more guaranteed ways of holding and moving money. Bitcoin can do that."