Topic: Bitcoin and wealth redistribution, ad absurdum. (Read 6475 times)
When talking millionaire, we're talking in 2012 dollar kind of terms, definitely not btc
The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.
Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.
Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.
Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.
there are only 21/12 million btc. not enough for the 12 million millionaires in the world. (not to mention the billionaires). if some percentage of the wealthy elite thinks that this is about future wealth they will purchase them at almost any price. op is right: this will be the moment when early adopters to bitcoin can get a nice chunk of this wealth. let´s just never sell out, save coins and let them pay astronomical prices.
Bitcoins are not currency yet. Bitcoins are the limited, unforgeable digital coupons in a global decentralized value transfer system. As soon as this system has gained sufficient adoption and occupied its full market share potential, Ludwig von Mises' regression theorem will apply and it will be a currency having been born in and grown out of the digital realm.
Nice, so some guy thinks it's not money because (according to his clearly limited view) money needs to have a non-monetary use first.
Can you see us all not giving a crap?
Can you see us all not giving a crap?
That "some guy" is the famous and respected economist Mises who is strongly associated with Austrian economic theory, which many Bitcoiners subscribe to.
I think that Austrian economics who don't think Bitcoin is their wet-dream come true either:
1. Lack the (technical) know how to understand why Bitcoin can make the claims it makes (primarily regarding security, fungibility and security) and not believe these
2. Aren't really Austrian economics
3. Be so indoctrinated and entrenched in their believes it takes more than reason to escape them
http://en.wikipedia.org/wiki/Ludwig_von_Mises
If Warren Buffet's USD is suddenly worth 0, do you think he's going to live out the rest of his life working at Burger King, or do you think he'll just start up some new ventures and be rich again by the end of the year?
Buffet only has a fraction of his net worth in fiat currency. He won't care.
Rich people have been smart enough not to save in fiat currency for a very long time.
That's true. So in reality, he won't lose any significant worth anyway.
However, even if he were holding 100% of his net worth in cash in his mattress, I still think it's fairly obvious that he's smart enough to simply find a way to embrace bitcoin and to become rich again very quickly.
So going back to the OP's scenario, I think a tiny % of wealthy people who got there out of sheer luck will lose their money, and that's about it. A lot of the bitcoiners who got rich out of sheer luck (ie. investing $25 back in 2009 just for kicks) will burn through their money and spend it on cars and other consumer goods, while a small % of them will continue to make smart investments and increase their wealth even further.
So looking at the big picture, nothing noticeable will have changed.
Buffer has two rules:
#1 Don't lose money
#2 Don't forget rule #1
If he would have to start from scratch now, he'd be done.
So your theory is the majority of wealthy people got there out of sheer luck and that if they lost their current holdings they would never be able to make that money again.
That's fine if you believe that, but I don't. *Most* wealthy people are there because they're smart, hard-working, dedicated, etc. and they aren't going to lose those qualities and transform into unambitious bums overnight.
No, I'm saying it takes time. The power of compounding is amazing
If Warren Buffet's USD is suddenly worth 0, do you think he's going to live out the rest of his life working at Burger King, or do you think he'll just start up some new ventures and be rich again by the end of the year?
Buffet only has a fraction of his net worth in fiat currency. He won't care.
Rich people have been smart enough not to save in fiat currency for a very long time.
That's true. So in reality, he won't lose any significant worth anyway.
However, even if he were holding 100% of his net worth in cash in his mattress, I still think it's fairly obvious that he's smart enough to simply find a way to embrace bitcoin and to become rich again very quickly.
So going back to the OP's scenario, I think a tiny % of wealthy people who got there out of sheer luck will lose their money, and that's about it. A lot of the bitcoiners who got rich out of sheer luck (ie. investing $25 back in 2009 just for kicks) will burn through their money and spend it on cars and other consumer goods, while a small % of them will continue to make smart investments and increase their wealth even further.
So looking at the big picture, nothing noticeable will have changed.
Buffer has two rules:
#1 Don't lose money
#2 Don't forget rule #1
If he would have to start from scratch now, he'd be done.
So your theory is the majority of wealthy people got there out of sheer luck and that if they lost their current holdings they would never be able to make that money again.
That's fine if you believe that, but I don't. *Most* wealthy people are there because they're smart, hard-working, dedicated, etc. and they aren't going to lose those qualities and transform into unambitious bums overnight.
If Warren Buffet's USD is suddenly worth 0, do you think he's going to live out the rest of his life working at Burger King, or do you think he'll just start up some new ventures and be rich again by the end of the year?
Buffet only has a fraction of his net worth in fiat currency. He won't care.
Rich people have been smart enough not to save in fiat currency for a very long time.
That's true. So in reality, he won't lose any significant worth anyway.
However, even if he were holding 100% of his net worth in cash in his mattress, I still think it's fairly obvious that he's smart enough to simply find a way to embrace bitcoin and to become rich again very quickly.
So going back to the OP's scenario, I think a tiny % of wealthy people who got there out of sheer luck will lose their money, and that's about it. A lot of the bitcoiners who got rich out of sheer luck (ie. investing $25 back in 2009 just for kicks) will burn through their money and spend it on cars and other consumer goods, while a small % of them will continue to make smart investments and increase their wealth even further.
So looking at the big picture, nothing noticeable will have changed.
Buffer has two rules:
#1 Don't lose money
#2 Don't forget rule #1
If he would have to start from scratch now, he'd be done.
If Warren Buffet's USD is suddenly worth 0, do you think he's going to live out the rest of his life working at Burger King, or do you think he'll just start up some new ventures and be rich again by the end of the year?
Buffet only has a fraction of his net worth in fiat currency. He won't care.
Rich people have been smart enough not to save in fiat currency for a very long time.
That's true. So in reality, he won't lose any significant worth anyway.
However, even if he were holding 100% of his net worth in cash in his mattress, I still think it's fairly obvious that he's smart enough to simply find a way to embrace bitcoin and to become rich again very quickly.
So going back to the OP's scenario, I think a tiny % of wealthy people who got there out of sheer luck will lose their money, and that's about it. A lot of the bitcoiners who got rich out of sheer luck (ie. investing $25 back in 2009 just for kicks) will burn through their money and spend it on cars and other consumer goods, while a small % of them will continue to make smart investments and increase their wealth even further.
So looking at the big picture, nothing noticeable will have changed.
I am talking about people holding the currency 'pure'. Not those holding other assets like stocks in companies, land, houses. Even if their value is given in terms of the old currency, the return is denominated in share of profit, production value or rental value. But if you are hoarding cash, loans, bonds, with the return fixed in currency terms, that is a different thing.
The wealthy are usually diversified, obviously. Ad absurdum means just a look at the extreme crazy case. Reality may fall far short of that, but it is still instructive.
The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.
Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.
Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.
Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.
False premise for today. The rich do not "hoard" any black shells, or fiat USD. Everything is invested somewhere. If you have stocks in Apple, and white shells become the dominant currency, Apple will switch over to the white shells as well to conduct and sustain their business. You were invested in the company Apple, not in black shells. Ideally you won't have lost anything.
The same in theory if you have black shells (resp fiat USD) in your bank account. Ideally, a bank is just an intermediary between lenders and loaners, and they would conduct the transition black shells to white shells pretty seamlessly. In practice and reality of course they're gonna use that scenario to rip off the clueless big time.
The wealthy are usually diversified, obviously. Ad absurdum means just a look at the extreme crazy case. Reality may fall far short of that, but it is still instructive.
The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.
Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.
Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.
Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.
False premise for today. The rich do not "hoard" any black shells, or fiat USD. Everything is invested somewhere. If you have stocks in Apple, and white shells become the dominant currency, Apple will switch over to the white shells as well to conduct and sustain their business. You were invested in the company Apple, not in black shells. Ideally you won't have lost anything.
The same in theory if you have black shells (resp fiat USD) in your bank account. Ideally, a bank is just an intermediary between lenders and loaners, and they would conduct the transition black shells to white shells pretty seamlessly. In practice and reality of course they're gonna use that scenario to rip off the clueless big time.
The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.
Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.
Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.
Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.
False premise for today. The rich do not "hoard" any black shells, or fiat USD. Everything is invested somewhere. If you have stocks in Apple, and white shells become the dominant currency, Apple will switch over to the white shells as well to conduct and sustain their business. You were invested in the company Apple, not in black shells. Ideally you won't have lost anything.
The same in theory if you have black shells (resp fiat USD) in your bank account. Ideally, a bank is just an intermediary between lenders and loaners, and they would conduct the transition black shells to white shells pretty seamlessly. In practice and reality of course they're gonna use that scenario to rip off the clueless big time.
Don't take his dream away.
He hopes he will see all the top500 working at burger king when bitcoin hits mainstream.
And he will pay 1 satoshi to Celine Dion to sing him every night a good night song.
The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.
Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.
Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.
Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.
False premise for today. The rich do not "hoard" any black shells, or fiat USD. Everything is invested somewhere. If you have stocks in Apple, and white shells become the dominant currency, Apple will switch over to the white shells as well to conduct and sustain their business. You were invested in the company Apple, not in black shells. Ideally you won't have lost anything.
The same in theory if you have black shells (resp fiat USD) in your bank account. Ideally, a bank is just an intermediary between lenders and loaners, and they would conduct the transition black shells to white shells pretty seamlessly. In practice and reality of course they're gonna use that scenario to rip off the clueless big time.
I wanted to transfer money hand to hand, just dont need WU anymore, what can they still add to it? Give me another free sim card? I don't want it. Their business is in the cross hairs, as Keiser would put it
I agree that wealth distribution never was and never will be evenly distributed, as communism proved you can't even force it to be. But a periodical reshuffling does give the developing world a fighting chance. Or at least the more entrepreneurial ones in those countries. Not that I lie awake about it at night, but I have had the occasional great conversation with kids dressed in rags in poor countries. That always makes a bitter impression of unfairness.
It really dawned on me, Western Union is a dead company walking. Remittances alone could carry the bitcoin success. Paypal next..
I own shares in WU. I think they can leverage Bitcoin when it becomes sufficiently widespread.
I agree that wealth distribution never was and never will be evenly distributed, as communism proved you can't even force it to be. But a periodical reshuffling does give the developing world a fighting chance. Or at least the more entrepreneurial ones in those countries. Not that I lie awake about it at night, but I have had the occasional great conversation with kids dressed in rags in poor countries. That always makes a bitter impression of unfairness.
It really dawned on me, Western Union is a dead company walking. Remittances alone could carry the bitcoin success. Paypal next..
I own shares in WU. I think they can leverage Bitcoin when it becomes sufficiently widespread.
Nice, so some guy thinks it's not money because (according to his clearly limited view) money needs to have a non-monetary use first.
Can you see us all not giving a crap?
Can you see us all not giving a crap?
That "some guy" is the famous and respected economist Mises who is strongly associated with Austrian economic theory, which many Bitcoiners subscribe to.
I think that Austrian economics who don't think Bitcoin is their wet-dream come true either:
1. Lack the (technical) know how to understand why Bitcoin can make the claims it makes (primarily regarding security, fungibility and security) and not believe these
2. Aren't really Austrian economics
3. Be so indoctrinated and entrenched in their believes it takes more than reason to escape them
Nice, so some guy thinks it's not money because (according to his clearly limited view) money needs to have a non-monetary use first.
Can you see us all not giving a crap?
Can you see us all not giving a crap?
That "some guy" is the famous and respected economist Mises who is strongly associated with Austrian economic theory, which many Bitcoiners subscribe to.
Nice, so some guy thinks it's not money because (according to his clearly limited view) money needs to have a non-monetary use first.
Can you see us all not giving a crap?
Can you see us all not giving a crap?
You could take all the wealth in the world and distribute it evenly to everyone in the world.
Within 20 years it would be right back to how it was before.
Within 20 years it would be right back to how it was before.
True because an even wealth distribution is sub-optimal.
But the difference is how you get there from the start. Mises is an authority I will quote as follows.
There are a couple of very astute comments on that facebook page.
Quote
Tal Salsa: Bitcoin is a violation of the Regression Theorem.
Not only is Bitcoin not money....it is not even a candidate to become money.
Yes, value is subjective....but Mises explains that to become a medium of exchange, a commodity must FIRST have a NON-MONETARY use. This refutes claims that Bitcoin is money simply because some think it has value.
Not only is Bitcoin not money....it is not even a candidate to become money.
Yes, value is subjective....but Mises explains that to become a medium of exchange, a commodity must FIRST have a NON-MONETARY use. This refutes claims that Bitcoin is money simply because some think it has value.
Quote
Christoph Dollis: "I think you are conflating two distinct concepts--currency and the medium of exchange. There are thefts of bitcoin currency to be sure, but the medium of exchange is far more secure than any other."
Andrew, you're confusing a few things, but let me try to point out a couple.
1. That it's useful as a medium of exchange. It is far too volatile to serve this role in any major sense.
2. That leaves it as an investment, which sounds sort of OK, until you realise that it isn't really anything except for some numbers.
3. And then, ya, people hoard it, and it gets stolen. But even if it doesn't, it will inevitably crash at some point as all Ponzi schemes based on non-existent financial instruments do.
Andrew, you're confusing a few things, but let me try to point out a couple.
1. That it's useful as a medium of exchange. It is far too volatile to serve this role in any major sense.
2. That leaves it as an investment, which sounds sort of OK, until you realise that it isn't really anything except for some numbers.
3. And then, ya, people hoard it, and it gets stolen. But even if it doesn't, it will inevitably crash at some point as all Ponzi schemes based on non-existent financial instruments do.
I would love to see them try to force us to do that
Shouldn't difficult given the multiple failures modes of Bitcoin.
Open source might produce a less vulnerable coin.
You could take all the wealth in the world and distribute it evenly to everyone in the world.
Within 20 years it would be right back to how it was before.
Within 20 years it would be right back to how it was before.
True because an even wealth distribution is sub-optimal.
You could take all the wealth in the world and distribute it evenly to everyone in the world.
Within 20 years it would be right back to how it was before.
Within 20 years it would be right back to how it was before.
It's just evolution. More adaptive beings survive to replace obsolete dinosaurs.
Humble geeks with agile minds will replace confident dandies with agile mouths.
Humble geeks with agile minds will replace confident dandies with agile mouths.
As it says in the good book, the geek shall inherit the earth!!
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