Bitcoin Forum

And we wonder why there is volatility?

http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12

There is some legitimacy to the claim that once there are more coins floating around, the fluctuations won't be so intense.

But when you've got 50% of the coins in existence being hoarded and played with by only 900 people .... you're going to get volatility. 

That's why Bitcion is so "volatile" (to all you "journalists" out there) ... its not because Bitcoin sucks. 

Its a little depressing knowing that coin production has slowed down so much as time progresses, and will continue to slow down.
 
Somehow don't we need to get those 927 people to break open the pinata and get this currency flowing?

-BittBurger-

When gold appeared did they evenly distribute it amongst the population? Noo....

This is how currency work's a few wont he majority, hell The american dollar is 99% owned by 1% of the population...

Article:

So far.  

The economic benefits of taking the control of currency out of the hands of a few power-hungry central bankers and giving ordinary people easy means of protecting themselves from the hidden inflation tax and the threat of seizure of their assets by the power-hungry politicians has the potential to make a lot of other people rich, and safe from the predatory nature of those in power.

The article neglects to mention how early we are in this process and the other benefits of bitcoin and instead wants to concentrate on envy.

Regarding the volatility issue, I seriously doubt it is caused by most of these early adopters. 

Prices are set at the margin and the day trader, fast money crowd is much more likely to be the cause of volatility than the strong-handed, true believing early adopters.

The criminals behind Cryptolocker are holding a few out of those 927 places.

They'll remain there as long as Kasper is not able to catch them.

These articles miss the point.  They're calling addresses people.  This would be the equivalent of saying 90+% of all US dollars are owned by 100 people (probably fewer), because BANKS are the ones holding the dollars for the vast majority of all currency.

A huge number of those stockpiles are likely wallets for exchanges.

You're out of your mind if you think those a substantial amount of those 47 are trading on the exchanges. Anyway, for all of the bitcoins that they "hoard", it just increases the purchasing power of the rest of our coins.

Notice that the average mega-rich bitcoiner is different from the average person. They aren't exactly the undeserving lottery winners; they were the only true believers when this thing was in its prenatal stage.

The initial distribution of BTC doesn't matter. It will increasingly flow to the productive people, especially because governments can't as easily forcibly redistribute it.

Good point, that really obscures everthing.

The 'hoarding' argument has been argued to death.

Only 2 people max can own half of all bitcoins.

Um, Huh?

It's referring to a certain "pool of people" who collectively own half of all bitcoins that have currently been mined.

But conversely, many of those addresses are likely owned by single owners.

And yet people complain fiat is unevenly distributed  ::)

I'm sure Goat and Rpietila are one of them  :)

as was gold.

but then the hoarders sold off and began circulating. EG Dubai/airport vending machines selling gold, pawn shops specialising in gold. 20 years ago you couldnt simply walk up to a snack machine or a town/mall store and buy gold bars (unless it was in the form of jewellery)

same will happen with bitcoin.

its still young, allow bitcoin to grow up before judging its future


wrong. i know your being sarcastic, but for those that dont get the joke.
a "bitcoin" can be owned by upto 10,000,000 people, if they all hold 1 satoshi each.

so there is plenty of scope to cover the world population, and eventually those that own the most will eventually sell out and put their hoards into circulation

In a way it's a good thing. People putting so much trust and Millions of their money into Bitcoin.

Good until they decide to cash out....

How many per cent of all USD is held by the 900 richest people in USA?

Definitely not 50%. Should be much less than that amount. The richest 1% (somewhere around 2 to 3 million people) hold 42% of the wealth in the USA. So should be somewhere around 10-20%.

Not that the stat is correct, but if it were its 3.1million people, so quite different.

This doesn't have too much bearing on the volatility as I don't believe those holders are necessarily active.  The volatility is because there's little to base a value on so the slightest news or a unexpected movement up or down quickly gains focus and runs away.  Add to this speculators either pumping or dumping and you have a recipe for large swings. 

Source?  See this:  Walmart Heirs Worth Same Amount As Bottom 40 Percent Of Americans In 2010
http://www.huffingtonpost.com/waltons-net-worth_n_1680642.html

I personally think that those 927 people do contribute to the volatility

1. A buy & hold/hoard strategy (ironically used by people that think they are supporting BTC) manipulates the volatilty of BTC to the upside. (It removes those BTC from the actively traded BTC amount.) BTC is volatile enough as it is with a small market cap but even worse if only a small % of coins are actively traded as small $ or BTC inflows/outflows drastically move the market.

2.Their unintentional strategy manipulates the price of BTC to the downside
(Once hoarded/held - their BTC don't contribute to the future buying pressure only additional selling pressure whenever they choose to sell.  I think it would help if some of them sell a few BTC into large rises and buy on dips with profits, that way I think they will help stabilize rising markets and supporting falling ones.

I agree with this. Exchanges and other bitcoin businesses don't usually have 1,000 addresses for holding their bitcoin, but a few hot wallets and maybe a few cold storage wallets.

this.

please stop posting these bullshit articles that don't understand bitcoins.

addresses != people



that said, the central point of "a few people own most of bitcoin" is still true, it just needs to be stated intelligently.


edit: I lol'ed at this comment:


nope on Dec 11, 6:00 PM said:

Please stop posting these utterly incorrect articles. Do you understand the difference between an ADDRESS and an INDIVIDUAL? I will break it down:

1. an individual can have multiple ADDRESSES.
2. exchanges and other investment platforms hold COINS FOR MANY PEOPLE in a SMALL NUMBER OF ADDRESSES, aka, A SINGLE ADDRESS can be holding the coins for MULTIPLE PEOPLE.

There is this amazing technology called "database" which uses magical math and electro-shocks to store who actually owns what! It's a weird old trick!

You want to sound so matter of fact about your claims, but you don't even understand the basic facts. You should delete this article to save face.

Read more: http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12#ixzz2nD5uj8JZ

So Goat owns at least 1k BTC!

Weirdly, that doesn't sound like all that much.  I am kind of surprised that only 927 addresses have at least 1k bitcoins in them.

Legend has it that Goat buried a 5kBTC physical coin deep underground in Thailand. It was no small feat, requiring a few backhoes and an overseas shipping container which was lowered underground with a guard dog. Goat's Thai lawyer checks in on the dog every couple days, sending water and body parts down to it through a tube.

http://xkcd.com/980/huge/#x=-6432&y=-9056&z=2 has a good chart you can zoom around with.

the breakout is:

1.3% of the HOUSEHOLDS, 1.6 million,  earn 20% of the money. $2 trillion dollars. ($400,000+ a year income)
08%, 09 million households, earn 20%... $2 trillion ($150,000-$400,000)
16%, 18 million households, earn 20%... $2 trillion ($90,000-$150,000)
23%, 27 million households, earn 20%... $2 trillion ($55,000-$90,000)
50%, 63 million households, earn 20%... $2 trillion (0-$55,000)



This is different than "are worth same as 40%" or "hold X% of the wealth."

"the walmart heirs" constitute either 1 mega household (don't think so) or multiple households...

I don't think that is the reason things are so volatile. I think cryptocurrency's inherent instability that is the real problem. Those 900-some people for the most part are not trading constantly, they are holding on to their bitcoins, and the little guys are moving coins around all over the place. The fact that regulations are still constantly coming down regarding bitcoins also contributes to their instability, as the market is nervous about their ever-changing legality and area of use.

I think it will become more stable in the next years but it will definitely add zeros to its fiat price : ))

It's important to remember though that the market cap of the US dollar is a multitude of times higher than the market cap of Bitcoin. If Bitcoin's market cap was as high as the US dollar, the wealth would likely be more evenly-distributed.

Oil was dominated by fewer people

Important point. Many of these 927 people will cash out within the next 1-2 years. Only a few months ago, we had around 1,200 people with more than 1K bitcoins. Now the number is down to 0.9K.

We BUY and hold, but don't contribute to the BUYing pressure?  Uh, OK.  When it dips low enough, I buy more.  And hold.

ITT: People starting to learn that all monetary systems are subject to the Pareto Principle (https://en.wikipedia.org/wiki/Pareto_principle).

I personally control multiple addresses, each of which have under 1000 bitcoin. But when added together... they are still far less than 1000. :(

A very few hoarders with many coins contribute to the volatility: they contribute to the volatility because they don't actually trade / spend:
Are we supposed to spend bitcoin or can we also use it for saving? I thought that the point of bitcoin, the currency, was also to be free.
Do you live your life spending everything you earn?
And how do you know an address/es is owner by a single person and not a society / group?

Personally, at this stage I don't care if bitcoin is more or less volatile as I see my money "lost" anyway, consider it's an highly speculative new technology

Note: bitcoin is the currency and Bitcoin is the network, Subject is misspelled twice!

Um, you managed to misquote the only sentence you pulled from my paragraph, you'd do great working for the MSM  :)

I said you don't contribute to the 'Future' buying pressure.

(Obviously buying additional BTC with earned fiat on dips because you understand the long term potential of BTC is good too. But many of the early adopters will have too much of their NAV already in BTC to justify adding further income earned outside BTC to their BTC pot.)

The buy/support wall is pretty thin, more BTC holders selling into rises and then placing buy orders at lower amounts could help contribute to decreasing volatility until there is more transactional demand for BTC.

No. I wasn't talking about addresses. I was talking about people. There are thousands of wallets right now with more than 1K BTC.

Hhmmm... I am also not sure. Just checked it, and found that #500 is holding 2,220 BTC.

http://4.bp.blogspot.com/-k92tl6GClZ0/Uqe0qQX_QtI/AAAAAAAAKcQ/tb8joV99eKI/s1600/bitcoin+distribution.png

It's like any store of wealth be it silver, gold, dollars, or what have you.

Don't be jealous and cry in your milk because someone has more than you: DO something about it.

Here's how: Create something of value other people are willing to purchase from you.  THAT is the most common way to become wealthy yourself.

Remember, during the gold rushes the miners were not usually the ones who made a fortune...the merchants did!

The potential for a merchant to sell goods or services and make hundreds and thousands of bitcoins is immense.  Do it now and get in on the ground floor while bitcoin is still relatively fresh and new.

This is your big chance, don't blow it by mopping around crying.  Either get in the game or stay on the couch, it's your call and you reap the rewards of your decisions.

Qft.

There are lots of opportunities out there, you just have to find one and do it.

1. You need to be clear that it's all the bitcoins that have been minted.

2. It maybe news to some, but U.S gov actually controls more gold than all of their citizens' combined.

I think in reality is LESS than 900. If I were a fortune teller I would say that it's something close to 90%. Some huge banks and hedge funds have its owners and those owners can look deceptively familiar. Cartel owning fiat currencies and its derivatives is very small and narrow. 95% of $330 trillion in derivatives is held by 4-5 banks. And derivatives + 0% interest rates for chosen ones are the most effective way of wealth re-distribution upwards

"We ran the calculations by Martti Malmi, one of Bitcoin's earliest developers, and he agreed they were basically sound. "The order of magnitude seems right," he said in an email to BI."

That's the best you could say about a made up number like 927. 

The masses have always complained about the 'bankers' hoarding unmerited wealth at the cost of the small people. Now, they will have 927 new hot targets of unmatched concentration of riches. And since all of it was made purely by pumping and dumping thin air, the bankers, given bitcoin replaces fiat, will look like innocent children. One can already envisage all the new illuminati stories in the next 100 years to come. And boy, they will be big. All the socialist buzzwords, that bitcoin depends on, like 'people's money', will go astray at the first mass crowd's realization that 0,00001% owns 50% of all the assets.
 

I am afraid you are incorrect, but it is not your fault. Almost no one cares to read the original (https://bitcointalk.org/index.php?topic=316297.0), which the BI article was based on.


That is the first sentence in the OP of the thread. Hilarious :)