Topic: Distribution of bitcoin wealth by owner - page 24. (Read 153446 times)

From one NWO viral strategy to the next. Facebook has a very clear purpose towards the 666. Mandatory face recognition. Soon mandatory facebook accounts. Mandatory tracking of every movement with your mobile geolocation tied into facebook, google, etc.

http://www.activistpost.com/2013/11/social-logins-for-government-services.html

http://www.nestmann.com/the-nsa-has-nothing-on-these-guys

http://www.nestmann.com/the-war-on-privacy-is-coming-to-a-license-plate-near-you

As for Bitcoin's badness and role. Read the archive of my posts.

That assumes they see any advantage to buying BTC. If they believe it is a Ponzi bubble and if they are correct, they have no need to buy it.

Risto's 17% average rake finding puts a new spin on the "couldn't the old rich just buy up all the bitcoins?" question. Of course they cannot, but the 17% rake should help quantify how much they could actually get if they started buying now.

You're making a lot of assumptions here.  First you seem to be saying that "we will see X", meaning (I assume since your prose is not precise) that generally we will see X, where X is investors seeking anything but long term investments.  Your justification for this statement is related to "knowledge workers".  Thus, you seem to assume that generally, knowledge workers determine what is generally sought after.  I'd like to see supporting evidence for this.  It assumes that knowledge workers dominate the economic spectrum and that those workers prefer knowledge gains rather than long-term economic gains.  This is pure speculation.  I don't relate to this sentiment.  As a knowledge worker myself (I think this term is too blunt, but whatever), long term investments are still extremely attractive due to the inherent shakiness of fiat currencies.  Also, you seem to ignore a large portion of our aging population which is interested primarily in long-term investments, rather than short term.  Finally, you don't mention the role that inflation has in preferring short term to med/long term investment.

I have an entirely different viewpoint. I think capital is dying by 2033. I don't think there is any level of gain that will cross the chasm to 2033.

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Probable answer:

Risto, what's your best unbiased estimate of the number of bitcoin holders who use something approximating your rake model?

I would be interested to see the ratio of bitcoiners who use their new wealth to start businesses (usually bitcoin related) versus those who buy new cars. Casascius did both of course.

lol this is what i did half a year ago, i have some dust scattered around on websites too low to even redeem

i might even have some dust on addresses i lost

but i'm much wiser now and my real bitcoins are much more secure.

That study has very questionable assumptions about associations of addresses. For example, it was rather clear that some of the "wealthy holders" that they listed were actually hot wallet accounts held by major exchanges. Other thing I found sketchy was their assumption that if one address sent money to another, that the two were likely owned by the same person, which is true for change accounts when making transactions, but there is no way to tell whether the change address is the first or the second in the transaction.

Very loaded question, as the majority of old-world millionaires are pretty much regular people. I'd call this a false choice. (In addition to the obvious answers you will get from this forum, asking you to consider the demographic likely to have stumbled into large BTC holdings -- i.e. engineers, tech-minded folks, cryptonerds and others with strong libertarian tendencies on average.) Again, either the division of the monetary policy in the US pushed you above middle class, or below it. It's the banking cartels and conglomerates, controlled also largely by brainwashed and clueless but regular people who genuinely believe that things are as they are through the magic of capitalism and hard work. Very greedy few at the very top deliberately make the policies that have caused these problems. Everyone else is mostly guilty by not paying enough attention to stop it.

The beauty of a cryptocurrency such as Bitcoin, where the key attributes for this are no/negligible remission and transaction costs and a fixed-supply, is its ability to undermine a huge swath of the traditional tricks in the bankster playbook for siphoning the world's GDP delta. As the world GDP is around 4 or 5% annually, with a fixed currency you could expect holdings (literal holdings) to gain that amount in purchasing power. As it is, our inflation is pegged deliberately at 3%, and may be more since we can't verify this -- and it is more in many countries, and is almost never less (Japan is near the bottem, as they have chosen 1.5% in the recent depressing decision to go inflationary due increasing difficulty competing in trade with countries artificially-boosting their currencies).

Q.E.D., anyone in the US not making an average of at least perhaps 8%, maybe more, on their net worth, is invisibly bleeding money to this deliberate black hole. Ergo, I fully expect BTC to appreciate at a minimum of this amount vs. USD. This assumes the supply-demand ratio remains unchanged (currently demand increases are far outweighing supply increases, which themselves of course are an ever-decreasing function). This also ignores any actual devaluation of USD which may become a factor soon as well.

For these reasons, it is an astronomically poor and uninformed economic decision to not hold BTC as your store of value, and conduct the maximum possible amount of commerce in that currency. I hope we see an explosion of solutions like Coinkite and "reloadable" debit cards (working on the latter myself with the ol' think tank) to permit the ease of users only converting to fiat when necessary and at the last possible minute.

They think differently, have different goals. If you are not from a wealthy family, and not an entertainment junky, what would you do with capital?  

The blockchain and it's many revolutionary uses (among which the possibility to transfer value in a trust less and decentralized fashion) gives Bitcoin a very definite, "real world" intrinsic value. The blockchain has multiple uses that have the potential to become more important than those of gold.

I kinda hoped you already understood that.

Rpietila, so you are saying that new made bitcoin millionaires have the power to do wonderful things for the world if I understand you correctly. What makes you think that these millionaires will be different than old school millionaires?

Tinfoil alternate theory I now posit (which should hold at least as much credibility as the above-referenced study): The Winklevii are Satoshi Nakamoto, but their over-trust in Zuckerberg taught them their lesson on how not to create and release virally-adopted technologies, so they played this one close to the vest, knowing in a few years they can parlay their influence within the elite to guide regulatory acceptance, as well as launch a spike in investor confidence when the stage is set. Then they will own not only the original Satoshi coins, but their own publicly known purchase amount (why so much by an elite??), and control massive amounts more with their ETF. In 2033 they will issue a royal mandate renaming the currency Winkles.

Only their benevolence will save us, but I fear a genetic purge of those below six feet in height...

Their credibility is in question since they recently published the poorly-formed and dubious study positing Satoshi and DPR are perhaps either the same or at least linked personally (http://bits.blogs.nytimes.com/2013/11/23/study-suggests-link-between-dread-pirate-roberts-and-satoshi-nakamoto/), a study which was funded by the Citi Foundation. Citigroup, of course, being the first of the major banks to fire the first "real" shot into the realm of upstart currency and bank circumvention, in the coming cold war on cryptocurrency-fiat transfers (http://www.reddit.com/r/Bitcoin/comments/1h0fmb/citibank_will_no_longer_process_any_transfers_to/). There has been coverage also, at least, on CNN, among many other places. Hopefully it stays below the main consciousness, but the damage has been done because it is out there, and all you have to do is inadvertently search for DPR or SR and find it on the first page of google.

They have already retracted that aspect of their findings, too: http://www.businessinsider.com/silk-road-satoshi-paper-retraction-2013-11?op=1

Yes, apparently all it takes to convince these all-star mathematicians of their errors is some intense blog rebuttals. I don't buy it. The FUD was either bought or influenced.

If I recall correctly, the paper is from the time when bitcoin was trading at about $10. With my rake model, these entities have since shed 70% of their holdings, on average. I have included 350k DPR hidden stash and 400k mystery owners + all that I believe beyond reasonable doubt have 100k or more. The rest is statistics. The difficult part is that we don't know if for example Winklevoss have sold a part of their coins or not. They are sitting on 10,000% gains and their price projections are conservative so they may not be über bull.

The possible existence of large hidden holders is something that cannot be ruled out, still. The 400k may be 1-2M if somebody has a masterplan. At any rate it does not affect the rest of the distribution, and due to bitcoin's crashy nature, even economically I don't think these pose a threat. They are in position to do wonderful things though upon coming public 

Have you incorporated the Ron-Shamir Entities into this? The paper's a little dated and it's unclear whether the balances on pg. 11 are still accurate, but it'd mean at least two additional billionaires (Entities A and C) who have taken pains to make their large holdings non-obvious.

This will be a problem as long as there are humans who do not make decisions in line with Perfect Rationality. (If we made decisions as a species that were Superrational, perhaps we wouldn't need exchanges at all.) Simply using past data and holding the currency prevents a flash crash from becoming more than a blip. Out of principle I wait to sell during a flash crash a decent bit past what could normally be considered normal trading blip, even in the event of obvious coordinated DDOS events across bitcoinland, but I cannot force users to behave superrationally, so at that point (having satisfied my morality) I will exercise my own attempt at Perfect Rationality and acquire more coins.

Even still, the events we have seen indicate a trend toward stability where this is less effective each successive time. Since my interpretation of the economic variables using game theory indicates that large holders cannot cash out back to fiat in less than perhaps several years, the only remaining thing to do will be to invest and participate in the Bitcoin economy. I also believe that the economy only grows less top-heavy as time progresses (asymptotically approaching what I expect will approximate a Pareto distribution), and even with some initial consolidation of wealth, which will naturally occur because of the adoption model during the bottom half of the adoption s-curve, the only option for these lucky few is for this to be held, or sold to those who want it.

Aside: A great study source for technology adoption models, since that was contested upthread, is here: http://personal.stevens.edu/~ysakamot/BIA658/man/week13/innovationdiffusion.pdf
Also here for thread posterity: https://mega.co.nz/#!5QsyELAQ!QPviZmp3MtOfppiYLmHreD7FtKAXfFmS-XJKDix1HFU

Since the creation of a wealthy elite in Bitcoin can only serve to dilute the buying power of the current wealthy elite (as it gains adoption, they will inevitably need some, but will be forced to buy at much closer to its realized value), this can hardly be said to be a worse situation than the one with which we started.

I don't believe there can be free market resistance to any attempt an an NWO-like entity without a cryptocurrency like Bitcoin. Perhaps it will not always be Bitcoin. Perhaps it is Anoncoin! We will never let "them" monopolize Bitcoin, because it was never about Bitcoin. There will never be a way for the elite to enjoy the fruits of their wealth monopolization, and prevent its erosion at the same time, outside of a major evolutionary split where the uberrace is an order of magnitude (or more) higher in intelligence. There will always be another Satoshi, until it is no longer necessary.


I agree with this strongly. The "middle class" of Bitcoin will be its backbone, as it did was the US economy before greed and poor economic theory resulted in the extreme tampering which has made existing in that bubble improbable (you're driven above or below it). Currently probably the strongest of hands exist in the 10 - 100 BTC range, assuming that it is also around 50 - 90% of their fungible wealth. Extra points for each factor on a list that includes being young, single, or at least no kids, etc. They've got way too much invested to not be confident in where it is going, but not enough to panic that a short-term crash will deprive them of their ability to direct funds toward anything that matters (kid's unexpected hospital bill, or erasing a big part of the college fund, etc).

An interesting metric would be: what percentage of coins are in the hands of people, for whom the holding represents X% of portfolio.

This does not necessarily correlate with the weakness of hand though. If someone has near 100% in BTC, he is probably quite strong, otherwise he would not have so much. Those with over 100% are leveraged and weak. Those with quite much could be the weakest, since they sell periodically and give their coins to new entrants. Those with little should be strong, since it is not a big deal to them. On the other hand many of them are newbies and easy to scare, or are only after a quick double and then sell, or just have not developed their confidence yet.

But I see a great asset in the 930 (mBTC=USD) millionaires, me included. This number is up from only about 150 a month ago! We are in the position to continue the world-changing because money is not an issue any more. So in this sense the world-changing potential has gone up 6x when price increased only 5x. And there are many more to come in the BTC100-BTC1,000 category

I would say that the number of full-time bitcoiners is also growing fast. Where I live, the first million does not give economic freedom, but a paid-for house, and a million in the bank does.