Topic: Why the maximum of 21.000.000 bitcoins cannot be enforced - page 2. (Read 11661 times)

That's the core problem: the advantage is simply too big.
To the people who are saying that hording is a bigger problem: How can you not see that this is the reason?
The only "market solution" is for this system to not grow big.
It's like saying communism "works", in that everyone becomes poor and no trade happens.

If you want a viable fixed (i.e., pre-determined and with zero final inflation) alternative solution it would be a "s-curve" for inflation:
Look up how internet adoption grew, how youtube, facebook, twitter, bittorrent and firefox adoption grew, and take something along those lines. This would not have been perfect, but good enough.

You're missing that there are people holding 100.000s of Bitcoins, and these people were not rich before.
The introduction of the USD was tied to gold, so there was no huge redistribution during its "birth".

And if you read my last post (#60) you should know why I chose to do so.

Addressed in Post #57 above, by me, which I see you chose to ignore.  The argument about "late comers" not accepting "unfair distribution" is ridiculous.  They do, and have.

(Offtopic aside) In Dutch it would, but thank you for the lesson, I'll do more my best |-).



I will not argue that.


Obsessed not, but yes, it's quite important for me. Altruism put aside, I'd like to see Bitcoin envy-free:
- Because there's a natural distribution that makes it very well possible.
- Because I expect the artificial scarcity as created by early-adopters in the current distribution scheme (and gravely advantageous for early-adopters),  will not be accepted by latecomers.

I think there's a difference between envy over stereo sets (of which the supply is limited by Nature) or Bitcoins (of which the suppy is limited artificially).

The current distribution scheme is very, very aggressively defended here. As stated elsewhere I choose not to respond to impolite posts, posts containing any disdain or posts containing false accusations. Bitcoin technicallities will be the only thing discussed by me here. And this was not meant for you, nathanrees19, but for some other posters in this thread.

For whom I have only one last message: I'll think about you when I'm riding my new mountain bike!

Not that there's anything wrong with it, but he's not an American (nor British).  He uses . instead of , as his thousands separator (and I assume , instead of . as his decimal separator), which is common in other languages.  In fact, I'd think most of the folks participating on these boards are not American (nor British), and many obviously are not native English speakers.  As such, I try to give a large leeway with how people communicate on the boards.

I don't foresee this to be a problem. Only a limited amount of people can ever own 100 gold bars.

(Offtopic aside) Curious choice of words. "Can impossibly". It makes sense, but in a way quite foreign to a native English speaker. Is this kind of thing common in other languages?


I think I can.


Your problem is that you are obsessed with the idea of being free of envy.

A world without envy would not work well.

For example, a friend of mine envies my new PC (quad core, 6950, ssd, etc). I envy his attractive girlfriend. His envy encourages him to work harder, while my envy encourages me to actually go outside. As a result, we are both more productive/social individuals than if we were indifferent to what others had.

The idea that an early adopter can benefit greatly encourages people to try invent/try/invest in new things, which would otherwise have been ignored.

Envy is the backbone of human development.

Your logic is flawed, while your math is not.  By this logic then, 5 billion people are using Bitcoins.  I'd say that's quite a success!  You need to divide by the population of people actually USING the currency.  So, in dividing by 5 billion, you're assuming 5 billion users. 

I argue that if we have 5 billion users actively using Bitcoins, if there are 5 people that own more than 10 BTC, not 1 of the 5 billion people will care all that much.  Warren Buffet has $40 billion.  I don't care.  I don't envy Warren Buffet, he worked hard for that money.  Does the fact that US dollars are not evenly distributed to all of us mean that US dollars doesn't work as a currency?  Obviously not.

If there are 5 billion users of Bitcoins, is there anything preventing someone from amassing such a huge fortune of 10 BTC? 

Let's explore.

10 BTC is exactly 0.000476% of the total of the 21,000,000 Bitcoins. 
Warren Buffet has $40B in assets.
The US has approximately $900B in circulation (http://www.visualeconomics.com/the-value-of-united-states-currency-in-circulation/).

So, 0.000476% of $900B is $4,284,000. 

Do you think Warren Buffet can get his hands on $4.2M in cash?  Of course he can.  Warren Buffet is also still alive, so he's clearly a "late comer" to the US Dollar Bill.


We have.  It's just that when we do, like the above, you ignore it, and hijack another thread to start the conversation over again.  That's Trollish.

Don't feed this communist troll.  Russia collapsed for a reason.  We will never let this happen.

Just my opinion...

Please stop feeding the Troll.  He's got this same discussion going in at least two different topics on the boards.  There are different people attacking his paper and he just keeps coming at them.

If you keep engaging him, he will keep posting.  He continues to hijack topics by posting the URL to his "paper" and getting people re-addressing the same things have have been addressed here.

We've addressed every "issue" he's brought to our attention, people have refuted the findings, conclusions, proposed algorithms, and opinions voiced in his "paper".

Net/Net:  There isn't any reason to adopt any of the ideas in his paper.  He's even taking credit for the client code having the transaction fee reduced, because "he published it".  It's just ludicrous.  Any/all of the issues in his paper that are in fact legitimate, have already been discussed, and there is already a way of handling in the current clients, protocols, and network.  There is no reason for a second "currency", other than the fact that HE wants to be on the ground floor rather than the current set of developers.  He'll disagree with that statement, though rather than working through the issues in the current code base, documentation, protocol, he proposes a new one (which has several flaws that have already been discussed in other co-opted threads he's posted his "paper" in).  Steve, please participate in the code discussions happening on GitHub:  https://github.com/bitcoin/bitcoin/issues  There you can actually make a difference in the development of the client code and engage in worthwhile discussions with the developers, rather than Trolling forums and hijacking topics.

At the bare minimum, let's all move this discussion to one place.  The other thread is here (which he hijacked on page 2, Post #26):
http://forum.bitcoin.org/index.php?topic=14693.20

I for one, will stop feeding this Troll on the topic of "his paper".  I think Steve is an intelligent person, maybe even concerned about the Bitcoin community and network and wanting to see it successful.  What I don't see him doing is working within the current system to make it better.  Instead I see him proposing a new method, that he thought of, without fully understanding whether or not his issues (except the "fair distribution" argument) can be addressed in the current code base.  If he wishes to discuss the current environment and ways to work within the existing framework to make it better, more power to him, and I'm happy to engage in those discussions.  But this back and forth talking about issues that aren't really issues, is just annoying.

I'll just leave with this, from his "paper":

"A minimum transaction fee of 0.01 bitcoins is currently enforced for small transactions, together with a maximum block size of 3 Mb".  I'm not sure how the two are related, but from Gavin Andresen (on GitHub, where you can actually influence behavior and results).

From:  https://github.com/bitcoin/bitcoin/issues/170:


When someone complained that the wording of the current (0.3.21) client was misleading/confusing, Gavin responded with:


Wow, so someone posted a legitimate issue with the, then, current client and Gavin responded and fixed the issue.  Shocking!  The poster didn't have to write a new white paper, didn't have to hijack threads, didn't have to start new forums.  He just participated in the open source project, had his/her issue heard, and received a response and fix.  Yea, that's open source.  Let's work within that framework.

No offence taken, you're absolutely free to feel as you like. However I am starting to feel like I've wasted some more time trying my best to put forward some, in my eyes, very valid critique. I did this only because I'm very enthousiastic about the idea of a cryptocurrency and it's possibilities, and want to try to help the idea further.

Because of the amount of 'real' money and investors' dreams involved I expected a lot of critique, disdain and even plain false accusations. I still have the hope some day soon some developers will wake up and say: let's do this again properly.

As for the above statement, it's easy mathematics to prove it. There'll be 21.000.000 million bitcoins (that is, if the current distribution scheme can be uphold). There's (way) over 5.000.000.000 people in the world's population. The maximum number of people that can have 10 bitcoins at the same time is 21.000.000 / 10 = 2.100.000, which is 2.100.000 / 5.000.000.000 * 100% = 0.042% of the world's populatioin. Therefore 100% - 0.042% = over 99.9% can impossibly own 10 bitcoins at the same time.

I know, in my paper I made a much stronger statement which is probably a bit exaggerated The point was to wake you up: even without this exaggeration the early-adopter advantage is huge and, more important, unnecessary and unexplainable.

So far, many people try to take me on on the little details, which I'm sure are not all correct. I don't think anyone has been able to invalidate the main issues.

No offence, but I felt like I wasted 45 minutes of my life reading your paper. Regarding the above statement, that would never be true because even in the most successful scenario Bitcoin would never represent the entire world's wealth. There will always be fiat currencies, precioius metals and other forms of pseudo currencies.

You know, I think you are wrong about the idea that new adopters won't like the rewards that early adopters get. Our society tend to like these stories of getting wealthy easy, and they like the idea that they are part of that system. I'm not comparing bitcoins to some pyramid scheme, but this is exactly why people get involved with pyramid schemes.

People look at how rich bill gates is and it gives them trust (falsely) that mircosoft is the leading company for a reason. It increases brand recognition that such a rich guy was made from the company. People expect that successful projects will result in successful people. And without really thinking about it they apply the same in reverse. Hearing about those successful people make them feel like the project is successful.

Our early adopter are our own bill gates. People hear about them and get excited to be involved. I don't think there are all that many people that whinge about them getting their returns unfairly. I think there is an unusual amount of "unfairness crying" in bitcoins because everything is so open. We know exactly how much effort those early adopters put in and, to some people, it doesn't seem like enough to justify their reward. This would likely be the case with almost any early investor of any successful company. But alas, those record usually aren't open to us and we can only speculate.

In the long run, I think anger over "unfair" early adopter returns will dry up. I don't think it is going to hold back the tide of bitcoins. 5% of americans hold 90% of all the USD. I'm pretty sure that the stats aren't that bad for bitcoins. So "uneven distribution" isn't going to be a problem in the long run.

Just my .02 BTC

There's nothing more telling than someone who is griping about a good trade. A trade is an assessment of risk for perceived value. Those who made the trade deserved their wins or losses. Anyone floating some 'redistribution' idea because these gains are 'unfair' really don't understand how markets work, or risk.

I wonder if we'll see the same people complaining about bad trades later on, where they sold at some mini-peak before prices surged again. "We need to distribute the loss, because it is unfair prices increased. Waa, waa, waaah."

Protip: Markets, like life, don't reward whining, only risk-taking.

Haha this guy doesnt even understand the simplest of concepts.

Mining bitcoins is not "more and more difficult" because the early adopters chose it to be so.

Mining bitcoins is "more and more difficult" because more and more people are trying to mine bitcoins. If fewer were, it would be less and less difficult.

Nice paper you clown. Good entertainment value.

The difference between bitcoins and stocks that IPO'd: Stocks being IPO'd represent real value, part of an existing, profit making, company.

Maybe it is accepted by latecomers that early adopters will have spent all their bitcoins by the time 'the distribution curve flattens'. Valid point. Personally I expect the early-adopter advantage to be way too big. (Anyone with 10 bitcoins now, will own more that 99.9% of the world's population can ever hold at the same time.)


Unfortunately there's some technical issues as well, feel free to read my paper or some valid posts of other people on this forum. Probably we'll never be able to tell which one made it fail.

It's not just envy, it's because they will realize there's no technical reason for the early-adopter advantage. That's the difference with e.g. gold mining, gold mining is (more and more) difficult because of Nature's limited supply. Mining bitcoins is more and more difficult because early-adopters choose it to be so. That's the crux.

So then you admit that you just don't want inflation-proof currencies to exist? Wow.

At this point, why are you even still here?

There are people who want an inflation-proof currency. If you want inflation so badly (because it's "fair", or for whatever reason you deem important), then why not just copy and alter the bitcoin source code, go create an inflationary digital currency, and leave those of us who don't want a stinking inflating currency alone, because we're not going to switch.

Geez.

The argument of distribution is pointless, frankly.  The same issue can be argued for every stock that IPO'd, every Oil field that was initially drilled, and every resource initially discovered.  Early adopters, settlers, miners, etc. all received grossly more of "object" than people that came later.  That never determined the success or failure of "object".  Why?  Because by the time you get to a flatter distribution curve, the early adopters have used, sold, spent, or traded their "object".  If you hold "object" forever then "object" is worthless.  Only once you actually put "object" into the open market does its value become realized. 

I can make the same argument of the Apple App Store.  If I had written an App, even a stupid "fart app" and had it in the store on the day it was opened up, I would have made a fortune (and people did).  Why?  Because there weren't any other apps and people were buying everything that showed up in the store.  Now, three years later, if you enter the store, you're MUCH less likely to garner a significant share of the App Store with an application of the same effort (heck, it won't even MAKE IT into the store).  You now have to have a much more polished application, or a much better idea, if you wish to be successful in the store.  Bitcoins are no different.  It was easy at first.  It's harder now.  It'll be even harder later.  That isn't a failing of Bitcoin, that's the reality of a "market" as it grows.  If Bitcoins hadn't grown at all, it'd still be easy to acquire them, and you wouldn't care one bit about a "fair" distribution.

We understand your argument, initial distribution is "unfair".  What you've failed to argue successfully is why Bitcoins have any different initial distribution than any OTHER asset, commodity, etc.  They ALL have the same "problem", which isn't a problem at all.


We're talking about money here.  There will always be envy.  If you have more than me, I'll envy you.  I don't really even care how you got them, I'll just think I should automatically have as many as you.  Unfortunately, with a currency, that's called Marxism.  I really don't want a currency system that is "envy free".  When you do that, you also eliminate the reason for having the currency.


It appears this is the crux of your entire argument. 

"Bitcoins will fail, because people who enter late will "envy" those that came before, and think they should have it as easy."

Only time will tell, but I have history on my side that says this isn't true (stock IPOs, Gold, Silver, Diamonds, Software, Companies, etc).  Bitcoin may fail, but your argument shouldn't be the reason.

I actually believe that if Bitcoin fails, it will be due to hoarding, artificially driving the price of the commodity up and making it too difficult for someone to come into the market, thus turning them away.

For example, we have just over 6M coins in circulation right now.  However, if I put in an order for 100,000 coins (less than 2% of the total market) right now, I wouldn't be able to get that order filled at the current market price.  THAT is the current problem.  I could easily buy 2% of a public company at very close to the current asking price right now.

I'm arguing that in future, latecomers will not accept Bitcoin's distribution scheme, as there is no good reason for favouring early-adopters. Early adopters might think so, might even think 'this one is working quite well', but c'mon we haven't even started yet.

I am bothering because I am afraid that, with all this money invested in nothing, when a collapse comes it will damage Bitcoin's name and probably the name of any cryptocurrency.


Move the decimal, fine so there's more divisibility. The point of early-adopters still having a huge amount more Bitcoins than any newcomer will probably ever have doesn't change by moving the decimal.


Well, I should maybe have used 'envy-free' instead of fair, maybe that's clearer. For the description of an envy-free system, please see my paper. It's quite obvious actually.


I'm not gonna replace your client. In fact, I'm probably not going to do anything. All I'm saying is that it is evident that at some point someone will suggest to a whole lot of newcomers to replace their clients for something completely fair.

Under those conditions I cannot think of any fair initial distribution scheme, and believe me, I tried. Any path I choose led to either an early-adopter advantage or something based upon some 'web of trust'. Please tell me if you now a fair way.

So it's not like 2% each year (like the official figure here in the Eurozone) and it's not that the 'profit' of this inflation goes to the state.


And I've tried so hard because at first I would at all cost try to avoid inflation. But I finally came to the conclusion that the inflation is not bad at all. Certainly not when it can be expected to grow percentually less and less as time goes by.


In the money model I'm advocating, money would be 'printed' when needed. When more commodities can be bought, money value will rise (little simplification). If value becomes more than printing, people will print. If too much is printed, value decreases and printing slows down. Printing has to continue however (blocks have to be created) so it will have to be sponsored by fees.

Why would we want to pull a "Bernanke" and print money?

I'm sorry, but we're not idiots. Talk to the federal reserve, hell - they may even give you a job.