Bitcoin Forum

In my paper (http://www.newbitcoin.org/documents/newbitcoin.pdf (http://www.newbitcoin.org/documents/newbitcoin.pdf)) one of my objections was that the current distribution of bitcoins is unfair. I didn't write this because I felt personally discriminated against, but I see it as a fallacy of the Bitcoin system. (Sorry, just learned a new word, 'fallacy', just had to use it.) A new insight has struck me that needs sharing.

In order to understand why the 21.000.000 limit cannot be enforced, it is important to understand that a distribution system with reward linear to the amount of work to find them (as described in my paper) is very possible. And that it is in fact the only way a cryptocurrency can be logically implemented. I'd be happy to defend that or answer any questions about that.

Latecomers to the bitcoin system will see a wealth distribution where less than 50% of its users own more than the other 50%. (Much more it seems: http://forum.bitcoin.org/index.php?topic=8667.0 (http://forum.bitcoin.org/index.php?topic=8667.0).) Where they have to do half a million times (current 'difficulty') as much work as the finders of the first blocks. (Current figures, situation getting worse.) They have the option of accepting this or start a new currency or a new blockchain. But they have another, much likelier option.

At the time enough latecomers realize how unfair the distribution is (and if at that time Bitcoin has achieved any economic significance), the "Fair Bitcoin Initiative" will be founded. They will bring out a bitcoin client that is completely compatible with the specification, except that it will award bitcoins linearly with the amount of work to find them, without an upper limit. (Yes, I know, that is not completely in line with the specification. But it's not so hard to imagine how it will be achieved.)

As soon as 50% of the bitcoin community has joined this initiative (promoted by hip webshops, mining pools with a yellow ribbon campaign), they effectively rule the distribution of bitcoins. They will adopt the only logical distribution scheme. Any early-adopter thinking this will not happen, that latecomers will accept the absurdly large early-adopter advantage, is wishful thinking.

So far I have been refraining from cashing in more bitcoins than to get back my little investment. I'll give all speculators three days to realize the implications of the above, then I start cashing in some more. Anyone willing to pay me more than my (electricity) cost to produce them will be sponsoring my new mountain bike.

Before I listen to anything you say, do you have any credentials that are worth noting?

Well, if it is about credentials here more than about what I have to say: I did graduate in IT at university.

It's the inevitable issue of any currency. The ones entered early potential have the best outcome. It's the advantage of foresight and sometimes plain luck. But if it was just as easy to make money by someone who comes in really late as someone early, there would be no point in economics or currencies.

There are people out there that would not touch bitcoin with a ten foot stick right now (rightly so, just look these price jumps) and you want to award these people on the same level down the line when bitcoin becomes stable? Now THAT'S unfair. Besides, bitcoin is supposed to serve as a medium of exchange and not as an investment vehicle, these huge incentives are supposed to help bitcoin grow in its early stages.

It's not about what I want, it's about what will unevitably happen.

You are not very original, this has been discused and answered forever.


And then you will have two currencies. The old system and the new system. The new system is more inflationary and people wont trust it and it will die. I actually think that the miners will see this and wont even go for the change in the first place.

I would love you to make a compatible fork of bitcoin... That makes the coins I own TWICE as valuable as I can spend them on both block-chains!

So what you are really creating is a HUGE and UNFAIR advantage to the early adopters.

(note) the coins in the bitcoin block chain will remain much more valuable.  Therefore, not twice as valuable... but you get the point.

The idea might have been stated before, if you drop me a link I'll even say sorry.

But please do understand, I'm not speaking of a situation of two co-existent currencies. I'm speaking of the current block-chain being taken over.

The idea that early adopters are unfairly rewarded is ridiculous nonsense. I'm not an early adopter, but I can recognize that if someone acquires something when its value is low and no else is interested, and the value of that asset subsequently appreciates, they are absolutely entitled to the gain.

If it's so easy to get rich by contributing to a block chain when it's new, then why isn't every one mining namecoins right now?

If it's so stacked in favor of early adopters, then clearly every one will choose to be an early adopter.

The truth is there is no easy way to KNOW what the market will demand, and contributing to something that eventually does become valuable is a valuable contribution to the economy and should be rewarded.

lol... as soon as you change the rules you create a fork, it doesn't matter if the fork has a shorter or longer chain... The original block chain will remain intact, and will keep on going happily.

This. And the guy has written a whole paper about bitcoins and makes mistakes like this...

You missed his point.

Even if what you're proposing was possible, and it somehow made bitcoins more valuable, you would still be making the early adopters, those sitting on hundreds of thousands (millions?) of bitcoins that much richer.

And that's a bad thing, right?

50% Or more will not be early adopters -> 50% or more will have envy -> 50% or more will have 50% of the computer power necessary to create the longest chain

Please do tell me my mistake?

Speaking of 'envy', mathematicians use 'envy-free' for the distribution I think is the only logical one: http://en.wikipedia.org/wiki/Fair_division

topic creator: you don't understand the definitions of the words you are using.  please read any introductory econ text.

None of the problems you are worried about need forks or even major changes. I already have a model involving angel miners for towncoins and they will stronger than mainline.

No redesign is necessary.

Sure... Bitcoin regards the longest valid chain as the correct version of the truth.  If you change bitcoin so the fees remain at 50 BTC forever, that would create a invalid chain for every bitcoin user that has not agreed with your modification.

Even if you had 100x the hashing power on your '50 forever' chain... that chain will still be rejected by every client that has not adopted your changed rules.

Would the situation the op proposes not result in the devaluation of BTC relative to the current value at that point?  How does one convince 50% of the users to adopt a policy which devalues their holdings?

Also difficult is getting them to do so all at once.  If they don't, their early generated blocks will invalidate, as they won't be able to maintain the longest block chain.

And that's the real issue... who plans on being first to make some attempt at forking the chain? Who wants to spend time and energy risking that the new blocks they generate may, eventually, perhaps, be recognized by enough other clients to matter? Even if you tried to organize a situation where thousands of agreeable miners have all promised to come online with the modified software at the same time, how does each of them know the others won't bail at the last minute? And if they have doubts, what's to stop them from bailing at the last minute?

And even if they do get their act together, how will they know merchants will accept their new bitcoin instead of the old one? If you are a merchant would you accept a currency whose supporters are inflationists or a currrency whose supporters want sound money?

None of these complaints require forks. None. This is what drives me up the wall about these threads.

Thank god ideas like this can wait until the OPs learn the problem is only perceived.

Did you mention HOW the current block-chain would be taken over?

The only way this can happen is for a single individual (or group in collusion) to own more than 50% of the hashing power of the network, as that is the only way that forged blocks can be added to the legitimate block chain.

Even if that happens, it only gives you the power to double-spend your coins, as you can put new transactions in the block and then verify them yourself.

However, you have to also then decide which is more profitable, double spending your own coins, or making more, as with 51% of the hashing power of the network, you're also reaping 51% of the bitcoins being produced by adding legitimate blocks to the block chain if you stay legitimate.

Forged blocks can also be identified by the community by looking at previous blocks and showing that the coins were in fact spent twice.  That will invalidate your impartial status, and will most likely result in the loss of miners to your pool, which will drop it below 50% of the hashing power of the network.

Also, new pools will also constantly come online, offering better reward methods to miners, which will result in miners leaving more established pools, thus further distributing the hashing power of the network.

I'm a newcomer with scant resources and a humble wallet, and I prefer the original system because while it is better.  So some early adopters got rich cashing in on the flood.  Good for them!

I agree.  Throughout time, the early adopters took the risks and if successful, reaped the rewards.

Guess what else isn't "fairly distributed":
Facebook stock.
LinkedIn stock.
Apple stock.
Gold.
The US Dollar.

All of them are, and will continue to be, distributed based on your ability to generate new ideas, and wealth.  You can buy gold, it's just expensive.  You can earn dollars, it just requires work.

How is that ANY different than Bitcoins?  Yep, the first people that mined them got them cheap and easy.  The founders of Apple also got all that Apple Stock to themselves.  That's so unfair.   :'(

1. Most important to understand is that a perfectly natural system for distributing a cryptocurrency in a fair, envy-less way exists. There is no need for a cryptocurrency to have an artificial limit. There will be inflation, yes. The second coin will cause 100% inflation, the 3rd coin 50%, the 4th coin 33%, etc. If inflation kicks in, mining will become less attractive and will be supported by mainly transaction fees (that are not newly created coins and don't drive up inflation further).

2. If it were not possible for a cryptocurrency to exist without an artificial limit, latecomers might accept a system where early-adopters have a slight advantage. Because a perfect alternative exists, early adopters (that we in fact all are at this moment) will not be able to explain the absurd reward they allocated to themselves.

3. Way, way more people than 50% will be latecomers, getting their hands on only (an unreasonable) part of the original distribution. It won't be so hard for the "Fair Bitcoin Initiative" to find supporters. With over 50% of the hashing power, you decide what is the rules. Not every clients needs to immediately follow, but why wouldn't they? They're the minority then.

4. It doesn't really have to happen at once, but there's no disaster if an attempt to synchronize fails. Sure, some bitcoins are lost. How hard would it be to slowly replace clients and synchronize the overtaking? With software that is all connected to the internet?

Couple of things.

1)  There are 8 decimal points in bitcoins, and I've read that they could add more in the future if needed.  Any currency total debates need to focus on this key fact, since most are used to a 2 decimal point currency they don't realize the impact on totals.   21 million total bitcoins only means that if it's reached and more need to be used their value will increase and people will take advantage of the extra divisibility to effectively "create" more coins passed the set limit.

2) In any emerging market there will always be huge advantages for early adopters IF(and its a big if) the market becomes successful.   Now if you're still living in a world where "that's not fair" has meaning, then you've got some growing up to do.  However if you've come to the conclusion that life isn't fair by design, you'll understand that people who are early adopters are also taking huge amounts of risk to be the first players in this market.   There is still a chance that bitcoins could become illegal in some areas and effectively useless for some of those who've invested alot of time and money, but that's just the risk you take to give yourself a chance at enjoying the potential advantages of being a early adopter.

While there may be, why bother?  This one is working quite well.  In fact, people coming to Bitcoins today have a better experience then those that came on Thursday of last week, because they can enter the market at a lower price.  No one is saying it can't be done, we're arguing that it isn't a problem.


The "artificial limit" issue has been dealt with.  Move the decimal.  This has the same impact to the economy as a stock split, we've been using those for a very long time, and they allow for predictable growth of the commodity.  Bitcoin can use the same philosophy and just issue a "split" by having the entire network move the decimal one place to the right.  Now there are 210,000,000 coins in the network.


This is different from an IPO stock how?  You seem hung up on this concept of "fair", but have not shown why the current system is unfair.  You can get "your hands on" whatever size of the Bitcoin market you are able to afford at a given point in time.  

The best way to ensure a "fair" environment is to Mine solo.  I assume you're doing so?  That way your hashing power cannot become "corrupted".


How did you replace my client?  I'm under no compulsion to upgrade my client.  Also the client source is open.  You can have it inspected to make sure that this "overtaking" isn't present in the code before you run it.  All of the clients are backwards compatible.  So you could still be running the very first client if you so chose.  This isn't Microsoft or Apple, this is an open source project.  Review away.

Yes, can anyone also address what prevents the developers of Bitcoin increase the upper limit to let's say, 50 million?

Bad publicity to say the least, and they want it to succeed rather than stealing from people, and I'm sure technical reasons as well (not everyone will upgrade their client). What prevents a taxi driver from crashing you into a wall on purpose? It's called trust.

So true.  Faith has everything to do with it.  Just like the Fiat.  I hope this will keep the developers honest or else, we will see a massive exodus into other BTC forks.

Thanks Imperi.

I missed buying linkedIn's IPO day last week. Does that mean no one should buy their stock? I have made money in stocks getting in late, but I have made sick money when I get in early. With BTC it is still relatively early. IMO.

Just change:
in the main.h file on your client to:
You'll also have to change:
To:
In the rpc.cpp file.

Now your max coins are 50,000,000.  Of course, you need to do this to everyone's client.  The question isn't why can't we, the question is why should we?

So the 21 million limit is a joke? Wow that's huge. Getting to smell really like a pump a dump scam extremely hyped and overpriced.

People like to think 'oh people early took a risk', well you know, in pyramid scams the early guys also take a risk, it's the same thing.

This argument is backed up by proof of big dumpers currently on the MtGox markets, those big dumpers are the top of the pyramid. Selling to the late suckers that are buying. This is 100% compliant to the definition of a pump and dump scam.

Bitcoin is IMHO a lot more fair than the current fiat money system, where the banks always get all the newly created money.

Anyway, there's nothing stopping you from creating a Bitcoin2. The software is there for anyone to use.

Did you miss the bit where he said you'd have to do that to everyone's client?

If you had the mythical power to alter everyone's client you could do a heck of a lot more than up the coin limit..

Ya know releasing updates for clients isnt hard at all, and since Bitcoin is centralized to bitcoin.org, its even easier.

Why would they want to? Also if Bitcoin becomes big, there will be many other clients.

Oh and if the limits gets raised just like that there will be a rush on the new client especially by miners

*facepalm*  Wrong.  If major miners deviate from what the rest of the network accepts, then they are simply self-selecting themselves away from their client population.

If 80% of the hash power suddenly decides to start minting 100 BTC per block, that does not imply that clients will follow their lead.

The entire community, including holders of bitcoin, must decide on major network changes.

Please.

Any whiff of a change like that to a new client, and I'm not downloading it. I haven't even upgraded to 0.3.22, and won't until I see a need too.

So yeah, good luck with the whole "arbitrarily change the rules" thing. Not what I signed up for.

Only if they're stupid as hell.

Mining is profitable because at the moment BTC has value (real or imagined, that's irrelevant for the purposes of this particular discussion). If you suddenly change the rules in a big way, it'll destroy that value. Mining might churn out 100% more BTC each block, but I find it very hard to believe that after an event like that, the BTC would retain at least 50% of it's value (which is what you'd need just to break even).

Therefore miners would be shooting themselves in the foot by changing over to the new network rules.

Furthermore, it's my understanding that it's not just the miners who have a say over network policy (except to the extent of what transactions to include/exclude). If everyone but deepbit decided to stick with the current rules, and deepbit switched over, even at 51%+ of the network hashing capability... I believe there's no difference from the perspective of the old clients between deepbit changing the rules and deepbit simply switching off all their hashing capacity. Feel free to correct me if I'm wrong on that.

Let's bottom-line this, and get to the root of your beef.

Say someone sets up a digital currency. Say they cap it at 100 million units, guaranteed in decentralized, open-source code.

What's the "best" way to initially distribute the currency? Don't point me to a link, I want you to tell me yourself, in brief.

OR...

Is it just that you hate the idea of there being no inflation, and believe any non-inflatable currency, anywhere in the world, used by any group, should never, ever, ever exist, and everyone should seek out and destroy all such currencies no matter what?

(I swear... has everyone in western society drank the Keynesian kool-aid?)

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.

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.

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.

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.

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 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.

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.

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.

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

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.

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.

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.

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

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.

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.

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.

(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!

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.

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

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".

This is not a problem at all. Unless "too big of an advantage" means "people are not willing to use bitcoins and enter the bitcoin economy", there is no issue. So long as people are able to purchase goods in BTC for less than their equivalent value in USDs, it will continue to be rational for people to obtain and use bitcoins.

Yes, it's no problem to use Bitcoins for trading, but they cannot be used by latecomers for saving, which was the intention and would have been at least as important for people, imho.

How many?  5?  10?  20?  100?  Why do you care?  Does it make your Bitcoins worth less?  If you think so, just go sell one, did you get your ask price?  Everyone who has argued the "unfair distribution" position has done so with the argument that it cannot be overcome for "late comers".  That of course assumes there ARE late comers, which implies that Bitcoins has moved out of the "hacker community" and into mainstream and now people have an issue with those "rich people" who have a lot of coins that they received "relatively easily".

I'm not arguing the introduction of the USD and it being tied to gold.  I'm arguing gold.  

During the California Gold Rush, it was "relatively easy" for people to head to California, grab a pick, climb into the mountains, and mine gold.  Lots of folks got rich doing it.  

Today if I do the same, I won't get anything.  All of the "easy" gold was found and mined.  Am I upset at the prospectors in the 1850s?  Of course not.  They took a risk, they invested time and money, they reaped the rewards.  

How is this different?  I now know Steve won't respond to me, I'd like to understand your position since you seem to agree with him.

Oh.  And who exactly is paying these developers for their time and efforts in maintaining the client software, dealing with bugs, responding in the forums, and maintaining the protocols, websites, and networks we're using for Bitcoins?  Oh yea, no one.  

So, just as I do not begrudge Mark Zuckerberg for being a billionaire because he "founded" Facebook, I don't begrudge the developers and early adopters of Bitcoins for being paper millionaires with their "easy" Bitcoins.  Why do you?

I'll respond to any post by anyone that is on-topic, does not contain disdain or false accusations.

EDIT: Dammit, did I just respond to a post that had a false accusation?

I don't begrudge anybody. I'm a libertarian at heart, but also a realist. It would be sad if Bitcoin failed for this reason, as it could have been easily avoided with a slightly less early advantage.
It's also true that it's one of the reasons for Bitcoins current popularity. With a "zero redistribution" policy it might never have taken off. It's basically trading short term for long term growth.

You went through all of university without ever hearing the word "fallacy"? God help us.

And this is where we'll have to agree to disagree.  Bitcoin adoption is on the rise, not the decline (currently).  I'm a relative "late comer" in that I actually don't OWN any Bitcoins.  Not 1.  But I have no issue with any of the devs or creators owning 10s and 100s of thousands of them.  Why?  Because I see my own opportunities (which I'm actively pursuing), no different than anyone entering any market.  If you measure yourself against those that have gone before, you may never try and succeed.  Before Facebook there was MySpace.  That didn't stop Mark Zuckerberg from founding Facebook.  It inspired him.

Bitcoins are inspirational.  They create opportunities for people.  THAT is why "late comers" will come to the network.  They won't care one wit (and this is where we disagree) that some people who came years and years before them into that network have more than they do.  They will only see their own opportunity to participate and build wealth.

What I *can* guarantee, is that there will be plenty of coins for them to acquire through their own successful opportunities.  You just move the decimal 1 spot to the right and perform a "stock split".  Boom, 10x more coins, release new client update that treats 0.1 coins as a "coin".  Rinse and repeat up to 8 times (currently).  No different than any stock split that happens today.

This is the question I have been thinking about for a while. Cryptocurrency was such a revolutionary concept that even today there are plenty of doubters, I don't see a better bootstrapping method except for what Satoshi and his cohorts did -- putting money/time/effort where their mouths are and proving the concept by their collective work.

There might be some "fairer" ways to bootstrap such currency, i.e. making a well-publicized (blockchain) launch date in advance, so miners have a more equal chance mining at the same difficulty, but that still can be viewed "unfair" to the even later adopters.  Also, rich guys with more money buying gigantic mining rigs thus having more bitcoins -- is that really fair? who is going to take care of the poor in countryside of Africa?

The distribution of "real" wealth throughout the world is far less equal and much less fair than that of Bitcoin, with more serious implications as well. Whereas wealthy Bitcoiners got their lucre through risk taking, having access to a small amount of capital, and having basic computer skills -- most of the world's wealthy simply got what they have by being born. Additionally, while one could live a happy life without ever owning a Bitcoin, there are literally children starving to death, for no fault of their own, simply because they were born without. Since there hasn't been any huge revolt recently about this serious inequality, it's hard to imagine people will take up arms over the distribution of private keys.

To make matters worse, Bitcoins will always go to those with the best mining equipment. So it's not like changing the amount given out per block will really do anything to help the poor.

Finally, I'm afraid you -- like so many others -- are missing the point. I'd be happy if all of the mining ended today. It doesn't produce any real wealth and simply dilutes the value of those who have invested in Bitcoin. If people want money they should add value to the economy, not come up with some crazy scheme to print it themselves. Imagine if we all just printed our own money. No work would ever get done!

Those who feel The Fed unfairly monopolizes production of currency are delusional if they think the world would be better if everyone could print as much money as they like. None of it would be worth anything.

A mathematically fair (envy-free) initial distribution doesn't exist as far as I know, therefore we have to get rid of the idea of an initial distribution. And switch to a permanent distribution, where everyone get's at all time as many bitcoins as the work he / she (his /her computer) performs.

Unlike the Fed, you cannot print the money without doing the work.

Printing is entry into the market without begging anyone for an opportunity. Instead of mining I've created a lending structure that works nearly the same way and I don't worry about my electric bills. When money comes in from my loans I start coding something anything even if I never publish. Then I put it out to be borrowed.

If I had a GPU miner I wouldn't be sitting on my ass. I'd get some coins overnight and code through the day.

The only insane thing about this community is running the miners all the damn time when in fact transactions are not made for trading goods.

As for dilution of value, what do you think the difficulty is for?

Truth is the security of the network only needs to be as good as the network is active with transactions. But nutjobs just want something to trade to get fiat.

It wouldn't be envy-less at all.. Soon enough the mining will be far beyond the means of the average joe (and thus the new coins would flow to an oligarchy anyway).. an inflationary system just means the miners get to tax savings as well as people actively transacting.. worse still, unlike the transaction fee system where transactees get to offer how much they want to pay for their transaction (and risk it not being processed), you would have a built in fixed rate of taxation that doesn't respond to market conditions.

Please see my post #14 in this thread for what I meant by envy-less.

And for me that concludes this thread, I feel I've said what needed be said and am starting to repeat myself. Thank you all for your kind attention.

If you have more questions, remarks or whatever, feel free to contact me at http://bitcoinforum.org (http://bitcoinforum.org).

By the time the general public might perceive this as an issue, bitcoin would have serious momentum. It'd be hard to convince people to move across to an inflationary currency as well (when I say hard, I mean downright impossible)

Here's your post #14;

In that case your mistake is just that 50% of the computer power is going to be controlled by the top 1%, not more than 50% of the participants. Over time the computing power will become more and more concentrated and less and less 'fair'. There would be no 'fair distribution' of the coin inflation/taxation it would mostly flow to the top few percent of miners. Your system allows the top few percent of miners to tax the entire userbase at a fixed rate of taxation/inflation that they can't negotiate (as they can now with the transaction fees). This would be much less fair than the current system.

Which is exactly what mining is, and why mining works.  People mining for the longest period of time, have the most bitcoins.  People mining shorter periods of time, have less.

It's already "envy free" in that way.  You can be upset you didn't find out about it until now, but you cannot argue that you haven't been mining as long as they have.

There is no way to distribute coins "where everyone get's at all time as many bitcoins as the work he/she (his/her computer) performs", because you cannot predict how much work that is, so you cannot predict how many coins to provide.

The current system is just fine.

Oh, and we're not "print[ing] the money without doing the work", people are sinking thousands of dollars, lots of electricity, and their personal time into mining.  That's the definition of "work".

I for one spend coins as fast as I make them.  Does two things:
1)  I realize an actual gain for my coins
2)  I put the coins I've mined into the economy, because I personally believe that hoarding is what is going to kill Bitcoin (if anything does)

Sure if all you want is CDs. I'm gonna pay off my crack dealer... er I mean education loans.

Not sure I understand that.  I buy stuff from Amazon.com, Newegg, etc.  Or I sell them on the exchange.

I have debts with beeg numbers. I hold and lend.