Topic: Can you help me refute a contrarian? (Read 2992 times)
As those with bitcoins use them they will own less. If they don't use them, then they are basically nulled. Compare this with fiat where those with a lot can print more at will. The first system starts unequal but equals out over time. The other system also starts uneven and remains uneven. Which system do you prefer?
Will Bitcoins be widely used in the future? Nobody knows for certain (or the price would be even higher).
Certainty is not binary. That is why some of us will gain disproportionately. Our certainty is greater.
Then it's not really called certainty. You're either certain or not.
Some will gain more than other because they see the odds as favorable/believe in cryptocurrency/ have money to risk.
Will Bitcoins be widely used in the future? Nobody knows for certain (or the price would be even higher).
Certainty is not binary. That is why some of us will gain disproportionately. Our certainty is greater.
re the OP:
Coase's theorem suggests that distribution will approach optimality over time. The defector in the dilemma, in this case, is not the dumper, but the hoarder.
Interesting, in several ways.
First, I have not seen these numbers. But numbers on Bitcoin ownership do get thrown around quite frequently. They have so far always been completely fabricated. That may not mean that they are wrong, but they are unscientific and unrealiable and you should not make decisions based on them.
(Most numbers come from assumptions on how to map wallets to cryptographic addresses, something that the pseudonymity of Bitcoin does not easily let you do. The only analysis that will come close to correctness would be a statistical analysis of Bitcoin users, and even when it would come with a high uncertainty. The telling factor of such analysis is to tell you exactly what this uncertainty is and why.)
Second, given the pretty much standard description of Bitcoin as a global currency for the Internet with no fixed ties to neither nation states nor their currencies, why would you expect its ownership distribution to be different from gold, silver or dollars? It is a free floating currency in a capitalistic day and age, and if you can't buy it freely because of distribution limits how could you possibly use it as a currency?
About the numbers again, how could you bootstrap a currency out of thin air and not have the value be zero from the start? From the beginning you can not buy anything with it and therefore it does not have value in the economic sense. As the value accrues the distribution will change as early adopters are bought out. But we can never expect a free floating currency to deviate much from the ownership distribution of other currencies. We are still in the speculative phase of Bitcoin, most of the value is still speculation that it may find more use in the future as it gets easier to use and new products are invented. So it is not unreasonable that a large part (and I would say 90% is entirely reasonable) was held just in the hope for it to gain in value. So far that has worked out pretty well.
Will Bitcoins be widely used in the future? Nobody knows for certain (or the price would be even higher). Will it be used for commerce or to store value? Will the deflation cause trade to stop as some people seem to believe? Nobody knows. But I think we have a pretty good grasp of the current use and value, and it surprises me that you and your friend seemingly expected something very different.
First, I have not seen these numbers. But numbers on Bitcoin ownership do get thrown around quite frequently. They have so far always been completely fabricated. That may not mean that they are wrong, but they are unscientific and unrealiable and you should not make decisions based on them.
(Most numbers come from assumptions on how to map wallets to cryptographic addresses, something that the pseudonymity of Bitcoin does not easily let you do. The only analysis that will come close to correctness would be a statistical analysis of Bitcoin users, and even when it would come with a high uncertainty. The telling factor of such analysis is to tell you exactly what this uncertainty is and why.)
Second, given the pretty much standard description of Bitcoin as a global currency for the Internet with no fixed ties to neither nation states nor their currencies, why would you expect its ownership distribution to be different from gold, silver or dollars? It is a free floating currency in a capitalistic day and age, and if you can't buy it freely because of distribution limits how could you possibly use it as a currency?
About the numbers again, how could you bootstrap a currency out of thin air and not have the value be zero from the start? From the beginning you can not buy anything with it and therefore it does not have value in the economic sense. As the value accrues the distribution will change as early adopters are bought out. But we can never expect a free floating currency to deviate much from the ownership distribution of other currencies. We are still in the speculative phase of Bitcoin, most of the value is still speculation that it may find more use in the future as it gets easier to use and new products are invented. So it is not unreasonable that a large part (and I would say 90% is entirely reasonable) was held just in the hope for it to gain in value. So far that has worked out pretty well.
Will Bitcoins be widely used in the future? Nobody knows for certain (or the price would be even higher). Will it be used for commerce or to store value? Will the deflation cause trade to stop as some people seem to believe? Nobody knows. But I think we have a pretty good grasp of the current use and value, and it surprises me that you and your friend seemingly expected something very different.
Keep in mind that when the price eventually hits 6 or 7 digits there will be no more "cashing out", because bitcoin will be money. Walmart will pay its suppliers in bitcoin and they will both pay their wage slaves in bitcoin who will buy things in bitcoin. The fabled stability that a certain group of degenerates dream of. Non-issue.
I would doubt that bitcoin will ever be the only/primary currency in the US. I would think that small and medium sized businesses may pay suppliers in bitcoin and some larger ones may as well but all commerce will not be done exclusively in bitcoin. The US government is one of the biggest consumers and biggest employers and it would likely never pay their contractors and employees in bitcoin It gets more complicated at the commercial level as corporations need to have the ability to "reverse" a transaction in the event of a mistake for example. Another problem with commercial international payments is the issue of being able to prove who funds were sent to. There are a couple of ways around this second issue but not so much with the first issue.
The reason why I would not be as encouraged with consumers using bitcoin for international payments is because the potential market for this is very small. There are very few transactions that go directly overseas in the US, it is probably more common in Europe but the Euro should make this just as efficient as sending a payment domestically
It is one of reasons, some alt coin might catch Bitcoin in future, where ownership will be more decentralized
Yeah, but not until someone creates a HippieCoin where every person on earth has one and they can't trade it or send it, or otherwise create inequality. That would be a happy world right, and it will be sure to takeover bitcoin and everything else because it's so equally distributed and peaceful and good.
Don't forget all the flash crashed happen this year is due to whale liquidating their position.
That 50 people own 1/3 of Bitcoins, just made Bitcoin less popular and have lover price as could have. Most of this 50 people got this coins cheap and fro them they have little real value. It is one of reasons, some alt coin might catch Bitcoin in future, where ownership will be more decentralized, people will pay real value for coins and will widely spread it all over the world.
Keep in mind that when the price eventually hits 6 or 7 digits there will be no more "cashing out", because bitcoin will be money. Walmart will pay its suppliers in bitcoin and they will both pay their wage slaves in bitcoin who will buy things in bitcoin. The fabled stability that a certain group of degenerates dream of. Non-issue.
I would doubt that bitcoin will ever be the only/primary currency in the US. I would think that small and medium sized businesses may pay suppliers in bitcoin and some larger ones may as well but all commerce will not be done exclusively in bitcoin. The US government is one of the biggest consumers and biggest employers and it would likely never pay their contractors and employees in bitcoin Keep in mind that when the price eventually hits 6 or 7 digits there will be no more "cashing out", because bitcoin will be money. Walmart will pay its suppliers in bitcoin and they will both pay their wage slaves in bitcoin who will buy things in bitcoin. The fabled stability that a certain group of degenerates dream of. Non-issue.
I would doubt that bitcoin will ever be the only/primary currency in the US. I would think that small and medium sized businesses may pay suppliers in bitcoin and some larger ones may as well but all commerce will not be done exclusively in bitcoin. The US government is one of the biggest consumers and biggest employers and it would likely never pay their contractors and employees in bitcoin 
The mumsy and dadsy comment was directed toward total global wealth distribution, which I consider haphazard and capricious--and potentially explosive and dangerous.
The bitcoin / libertarian / Ron Paul / anarcho-capitalist crowd and the politically left-leaning / occupy Wall Street crowd have more in common than either might think. It would be in everyone's best interest to focus more on how they agree, and focus less on how they disagree.
The former crowd emphasizes the evils of concentration of power; the latter emphasizes the evils of concentration of wealth. The distinction is not as clear-cut as we sometimes make it out to be.
Oh, yeah...great thoughts, BTCTrader71!
Many of the early holders got into Bitcoin for ethical and technological reasons and are unlikely to attach much importance to their net worth and a large part of them will almost certainly use it to fund projects that benefit everyone. Maybe that sounds idealistic in this money worshipping world but reading discussions from before the huge speculative interest arrived supports it.
People who got into bitcoin early for ethical reasons have no reason to feel guilty about getting rich off their efforts. One of the basic ethical tenets is to take human self-interest and harness it in a way that is constructive for all, rather than fight against it (which is always a losing battle). This is why the whole bitcoin movement will succeed. I have heard some early investors advocate a 70 / 30 strategy -- invest 70% of bitcoin-related wealth in the form of bitcoin, invest 30% in bitcoin companies and startups. This makes the most sense to someone whose goal is to maximize their net wealth. Simultaneously, it builds the economy for everyone.
Individual needs and societal needs, being pursued in unison. Who woulda thunk it? (Answer: Satoshi, that's who.)
I agree completely. In reality, the 999 really don't have nearly enough incentive...yet...to test that dilemma. There just isn't enough in it for them. I'm concerned that if/when they do, it could have pretty serious ramifications on the value of all BTC holdings.
I mean, we've got people on this forum that think their 1-3 BTC will eventually bring them the purchasing power of hundreds of thousands, or even millions, of dollars. And what you're saying (and I agree with) is that these early holders probably couldn't cash out right now for $150K each on average.
My contrarian friend probably has it wrong, too. The probability is likely somewhere in the middle.
Somewhere in the middle -- agreed. They will probably cash out their bitcoin (not just into fiat, but into other investments as well) gradually, rather than all at once. It is the rational thing to do. Think about it: if one day 5% of your wealth is in bitcoin, and a year later 50% of your wealth is in bitcoin (because the price has gone up), it makes sense from an investment standpoint to diversify your portfolio, which means taking some (not all) bitcoin and putting it into other investments. Some (smart, imho) investors advocate targeting a fixed percentage of your portfolio in bitcoin. By that strategy, you cash out incrementally as the price rises.
And that is how the drop of ink diffuses through the tub of water.
[...] It seems to violate some of the spirit of what I see on this board, suggesting a movement of the people by the people and for the people. [...] One could (and I would) easily argue that concentration of the distribution of wealth in our world leads to a lot of problems related to power, politics, and equality of even opportunities. [...]
I think most early adopter bitcoin bulls agree with bitcoin as being (and becoming) of the people, by the people, and for the people. Between concentration of wealth and concentration of power, they might parse it like this: concentration of power is the main evil. Concentration of wealth can be evil, if the wealth is used to purchase power. Which it often is -- hence terms like "crony capitalism," "corporate welfare," "robber barons." The basic recipe here is that people in the so-called private sector pay off government officials to protect their monopoly or, even more brazenly, to give them money directly. Our current system of money and banking is a prime example of that, one that periodically siphons billions and even trillions in wealth from the poor to the rich, all the while saying that this is being done to protect the common people.
Bitcoin does not aim to change human nature. Bitcoin will not counter the above evil by stealing from the rich and giving to the poor. But bitcoin offers a way to remove and replace one of the greatest tools of theft (from the poor, to the rich) and deception of all time, central banking. That is the main reason why bitcoin early adopters are not troubled by the current, transient, concentration of ownership of bitcoin: it will counter the ability of the elite to maintain their concentration of power. (The second reason is the one I stated in an earlier post - bitcoin ownership is slowly diffusing throughout human society, like a drop of ink in a tub of water.)
On the question of whether the main owners will decide to dump their bitcoin for a quick profit: this all boils down to whether you view bitcoin more as a tulip-mania style bubble, or more as something of fundamental value, whose high prices are now, or will be in the future, justified by that fundamental value. (Technically, the question at hand is how do the 1000 people with half the bitcoins view that question. But what we really want to know is: what is the actual answer to that question. Because whoever owns most of the bitcoins will have invested the time and energy to figure out the real answer.) My belief is that bitcoin has fundamental value. However, it took me quite a while to appreciate how and why this can be the case. Most people have never heard of bitcoin. Of those who have, most do not understand what all the fuss is about. It is the small, but ever growing, group of people who do understand what all the fuss is about, who are building the bitcoin economy. And yes, they are investing in bitcoin. At the end of the day, it will be their prescience that will allow them to change the world for the better. I will not begrudge the profit they make. They will have deserved it.
What's maybe more important in the distribution is who rather than how much. Many of the early holders for ethical and technological reasons and are unlikely to attach much importance to their net worth and will almost certainly use it to fund projects that benefit everyone. Maybe that sounds idealistic in this money worshipping world but reading discussions from before the huge speculative interest arrived supports it.
I don't disagree with this at all, but it still makes me nervous. It means the value of my holdings (not much in the grand scheme) is at least somewhat dependent on the 999 to behave some certain way. I mean, I'm damn sure not putting my life savings all in, let's put it that way.
Keep in mind that when the price eventually hits 6 or 7 digits there will be no more "cashing out", because bitcoin will be money. Walmart will pay its suppliers in bitcoin and they will both pay their wage slaves in bitcoin who will buy things in bitcoin. The fabled stability that a certain group of degenerates dream of. Non-issue.
If I read the models correctly, 50% of the shares on the market would likely cause MORE than a 50% drop in price, but even at a mere, say, 60% (and I think it would be higher),
So for the 999, with a price of 650, under price pressure from selling their shares, you're probably talking about maybe $1.4 million for each if they all cashed out now.
So for the 999, with a price of 650, under price pressure from selling their shares, you're probably talking about maybe $1.4 million for each if they all cashed out now.
That is insanely optimistic. 10% of any commodity market, including shares, being dumped at one time would crash the price to 10% of the value, that is more like it
So no, you can't just sell half of all bitcoins for 1.4 billion total, it just won't happen - 140 million, if you are very lucky.I agree completely. In reality, the 999 really don't have nearly enough incentive...yet...to test that dilemma. There just isn't enough in it for them. I'm concerned that if/when they do, it could have pretty serious ramifications on the value of all BTC holdings.
I mean, we've got people on this forum that think their 1-3 BTC will eventually bring them the purchasing power of hundreds of thousands, or even millions, of dollars. And what you're saying (and I agree with) is that these early holders probably couldn't cash out right now for $150K each on average.
My contrarian friend probably has it wrong, too. The probability is likely somewhere in the middle.
If 0.6% own 36% of the wealth, that's ugly
Is it ugly that 36% of world records are made by 0.6% of athletes? (Real numbers may differ, but the principle stays). Is it ugly that 36% of bestsellers are written by 0.6% of writers?
Is it ugly that 36% of greatest scientific discoveries are made by 0.6% of scientists?
Creating and maintaining wealth requires talents, just as sport or art or science. And distribution of talents in this area is just an uneven as it is in all other areas. Because of this if you let people keep wealth they created, some people will be much richer that others. You have to choose - you want freedom or equality. If you looking for equality, bitcoinland is not the place to look for it. Because bitcoin is all about letting people keep their money.
Well, reasonable people could certainly agree to disagree on this, so I'm absolutely not trying to say that I'm right and you're wrong. But I would say that wealth distribution is clearly not a meritocracy in the way that athletic competitions are. Especially for the 0.6%, it is far more correlated to your "choice" of who your dear old mumsy and dadsy are.
And I agree with you regarding equality, but I think a little more equality of opportunity is worth working towards. Impossible dream, I know, but it works as a concept.
Why do you need pretexts? Why don't you give us (and yourself) your real reasons? Why would anybody hide his real reasons even from himself? Probably because the reasons are ugly. For example, you may feel entitled to other people's money. Are you? You are not brave enough to rob people, so you would delegate the robbery, along with the risk, to state, while you would just vote for right robber. And you would prefer to think of yourself as of honest person, rather than as of robber, so you are in search of an ideology that would repaint the robbery as an honest and even noble occupation. So comes "liberalism", i.e. socialism. And vuala! You are not robber, you are noble person! You take not for yourself, but only for the poor underprivileged kids! For just a bit more equality! You are fighting for the impossible dream! You are practically saint! And your opponents are practically devils.
Don't you see how hypocritical it is?
You are working for "a bit more equality". How much more do you want? Exactly? The fighters for "just more equality" started from 1% tax, and since then were pushing and pushing and pushing for "a little more". Now they are taking and redistributing about half of GNP, half of all what people of the whole country produce, and what? You dismiss it as it's nothing and ask for "little more". Do you people have any sense of shame? You are taking from people half of everything and you are still not satiated! You still demand "a little more"! You won't stop until you get everything. And when you'll get everything, the world economy will collapse. The collapse of the Soviet Union is nothing compared with it, because Russians had West to flee to and to receive help from. But when the world economy will collapse under your weight, whom would you ask for help, for "a bit more"? Where would you flee to? Nowhere to.
Don't you see how dangerous it is?
It's for protection from such well-meaning re-distributors bitcoin was created. Hopefully, it still has several years to mature and save the world from the catastrophe you are preparing for all of us.
(Nothing personal, I've no doubts that you personally are noble, altruistic and well-meaning guy. Which makes things even worse, since egoistic bastards can at least be held at bay by threat of punishment, while altruistic ones would happily sacrifice themselves for their noble world-destroying cause).
I'm probably not as noble or altruistic as you would give me credit for. My use of the word "ugly" was not very carefully deployed, but what I was referring to was that it is ugly from the perspective of somebody using bitcoin as a store of value or hoping that the price goes up relative to other currencies. I didn't mean that the bitcoin distribution was philosophically, existentially ugly. I do think that distribution could potentially impact value. It might not, but it might.
The mumsy and dadsy comment was directed toward total global wealth distribution, which I consider haphazard and capricious--and potentially explosive and dangerous. That doesn't mean I am an active redistribution advocate. I wish it were different, but I'm not proposing steps to make it so.
And when you quote my "a bit more equality" it is a little out of context, as you left out the next two words, which were italicized. What I said was "a bit more equality of opportunity" and that is significantly different. I'm not trying to minimize the fact that we probably have different views on the ideal distribution of wealth, because it seems as though we do. We probably also have different views on tax policy, which I think is significantly different from wealth re-distribution.
But I did want to clarify that I don't consider the distribution of some specific small subset of $7.9 billion (er...now about $7.5 billion) as any kind of philosophical or policy issue. I have no philosophical stance on it at all. My only concern is that of an asset holder and how the distribution affects the value of what I hold. That's not noble or altruistic at all.
Good discussion, though. Thanks for sharing your thoughts!
Circulation is irrelevant. It is the holders' supply (limited by design) and holders' demand to have coins in reserve.
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