Why is nobody actually reading my original post? (EDIT: because it's too long-winded and not to the point enough. that's why.)

I addressed this point in my note below "fact 2". I said the richest person now probably holds less than 0.1% of the actual global wealth. The richest bitcoin holder holds 2.1% (under the assumptions about wallets being shared, etc.) I then assumed that bitcoin will not only take over the money supply in the narrow sense, but also acts as a commodity/store of value, like gold.

I am working from exactly the scenario that many in here on some level seem to believe, if allowed to dream: that bitcoin could one day replace both fiat currencies *and* the current illiqid assets that act as store of value, like gold.

And in that case, "2.1% of bitcoin" does in fact come close to "2.1% of overall wealth"

Actually, you're wrong.

A new blockchain could in theory simply dismiss all old addresses and the respective value they contain, but could transfer a part of the value contained in those old addresses over to the new chain in case you can prove ownership of the old addresses (with, obviously, the private key).

This could be the way to implement, for example, a "50% haircut on all wallets with more than 100k coins" scenario.

One more time, in case I didn't make it clear enough: I'm not saying that's what we should do, just that it would be possible to do that.

The big difference is actually that nowhere do I personally suggest to raise the number of coins.

I speculate (and invite you to speculate as well) about the possibility that this could happen one day, and how to price in this possibility.

My question could have just as well been "How likely is it that mtgox goes bankrupt, and how will it affect the btc price?". You wouldn't accuse me of being a causal factor in mtgox's bankrupcy, would you? :P

You're just being stubborn, not able to distinguish your own feelings on the topic from a rational (though hypothetical) discussion: my entire question was obviously based one the possibility of such a fork (if necessary), assuming that this chain will be the one that actually holds any value.

Sure. You can be the one guy screaming "but that's not the original bitcoin" at the top of his lungs, but if the market disagrees, what's the point?

Before you object that it will be just "another worthless altcoin", read my original post again. I said bitcoin holders *themselves* might conclude at some point that redistribution is necessary/in their own best interest.

True. There's however another 10 million coins to be mined. I simply wanted to illustrate the extreme concentration of wealth in the hand of a few individuals. On top of that, we will probably have a not-quite-as-extreme-but-still-pretty-bad concentration of wealth in the hand of a few thousand/million individuals.

You know there's a difference between "cannot happen" and "is not likely to happen, in my opinion".

(your account says you registered in 2011, so I'm sure I don't need to tell you what is technically possible to implement)

"some degree of advantage" is fine. A concentration of wealth an order of magnitude larger than what we have now could be, hm, problematic.

I don't believe Freicoin solves the problem. I don't know if there is a solution... a cryptocurrency needs to reward early adopters to further adoption, but if the concentration of wealth is too high, it might ultimately limit adoption again.

I didn't say that's the way to go, I'm sure you caught that. I'm summarizing a hypothetical argument in favor of redistribution.

...

There's a more formal side to this, I suppose. I forgot if there's a canonical name for this, and who commented on it when I first head about it, but if I had to guess, I'd say it was chodpaba.

For any form of currency there has to be some optimum value of distribution in order to maximize the wealth held by the richest individuals.

Say a single person holds 99% of all coins. Nobody would be interested in using bitcoin in that case, so the wealth held by that person would be near 0.

On the other hand, if he would be willing to part with some of his coins, he will effectively increase his wealth, since the value per coin will be higher, because more people will be interested to buy/own/use them.

Let's do some quick, back of the napkin estimations:

The largest wallet holds 447785 btc, there are currently 11643050 btc in existence, and a total of 21M will ever exist.

Fact 1: The largest bitcoin holder holds about 3.8% of all current btc, and 2.1% of all btc ever created.

Note: this assumes the holder of the largest wallet is a single entitity (when theoretically it could be several individuals holding the coins), so the percentage of bitcoin held by a single person could be lower in fact. On the other hand, the above estimation assumes the holder(s) of the largest wallet do not hold any other coins.    
    
For the second estimation, I'm using 2010 data because that's the most recent estimates I found for money supply. Back then, Carlos Slim was the richest man on earth according to Forbes (he still is, btw), at 53.5 billion USD. The global M2 money supply  ("money and close substitutes") in 2010 was 55 trillion according to the estimate I found (Mike Hewitt, DollarDaze)

Fact 2: The largest "traditional" holder of assets of any form holds at most about 0.1% of the entire world's money supply.
    
Note: chosing M2 as the base is a comparably small estimate, as it doesn't include stocks, gold, etc., so in effect the percentage of wealth held by a single person is probably even lower. Bitcoin on the other hand is something of a hybrid -- liquid enough for transactions, commodity & store of value by design, so it could act as both.
        
Conclusion: If bitcoin would ever act as the world's primary monetary basis (and assuming of course the large bitcoin holdings mentioned above are not abandoned/sold in the meantime) we would have an unprecedented concentration of wealth.

Which leads us to the ....
            
Hypothesis / taboo topic

At some point down the road, we might decide to either raise the total number of btc (maybe 40 million? or 4 billion?), or to simply redistribute a percentage of bitcoins acquired before a certain date (10% of every wallet above 100k btc? 100% of every wallet?).

In either case, we're talking about some form of expropriation/dilution of wealth, "for the greater good". (EDIT: there, I added quotation marks around that term. happy now?) How do you feel about this?

If you answer that this will never happen ("bitcoin is deflationary by design and intrinsically rewards hoarding, nothing can change that"), do you see the  -- hypothetical, for now -- extreme concentration of wealth as a problem, at all? For sure, nothing bad could ever come from an individual wielding almost unlimited power.

Final question -- this is the speculation forum after all: how do you price in the mere possibility of the expropriation scenario I described above? After all, you're investing in bitcoin because you know that one day it'll make you filthy rich. What if one day we ourselves have to conclude that we either redistribute some of the bitcoin wealth, or otherwise our little experiment is bound to fail (because, what's the point of a currency if only a minor fraction is held by the general population?)

After reading a number of your posts in the past week or so you almost made it to my ignore list. Good thing I didn't. +1 for non-black/white thinking. (same for the common "in 10 years, a coin will either be worth MILLIONS, or NOTHING!!!" slogan)

Fine. But if so, then August 8, 16 and 23 were calms before the storm as well. Pretty mellow storm, I must say :D

We're looking at the same data I guess, but I see it differently. Bid/ask ratio, normalized wrt curent price (something that the wonderful coinorama.net does automatically), the ratio steadily went up throughout August, from 0.5 to a peak of a bit above 1 on August 31st, then declining back to an 0.8-ish value that was the peak value a few days before, higher than almost all of previous August. Then it stabilized, slowly gaining (at around 0.83 now).

How is that a brewing storm, exactly?

We get it, you recently went short on bitcoin. Understandable, the price was/is tempting. Buy something nice, and relax.

Excellent point. Related one: if you're a wealthy individual/hedge fund/any entity with substantial amounts of money, being generally of the opinion that bitcoin has some chance of success and therefore planning to make an investment, would you (a) take some very high risk  gamble, possibly risking your entire investment, or would you (b) try to buy in at an early point at a comparably low price, while keeping slippage as low as possible.

I'm not saying there are no speculators of the first category, that try to execute some high risk/high reward manipulation schemes, but the more paranoid in here seem to believe that everyone with a lot of money entering bitcoin is on a mission to manipulate the market, and initiate wild price swings, when in reality, most of those will probably simply try to buy in as cheap as possible, and then wait.

There's nothing I need to add to my original post, since you didn't actually contradict anything I wrote (or linked to), but just spread a bit of snark around. Not that I mind that, but let's call a spade a spade.

Like with many predictions on here, time will tell. Just do me the favor to stand behind your claims of today if, say, within 2 years from now Slovenia banking hasn't gone full retard (by which I mean: haircut on all deposits, independent of which bank they're in). Same for me, of course, in case they do :)

Yeah, well, that's just, like, your opinion, man.

Here, have some facts. [1], [2], [3].

The tl;dr of the above: Unicredit (SpA) is somewhere in the low middle of European banks wrt credit ratings, outlook is "negative" largely due to expectations about the Italian economy, but reports by rating agencies stress that the bank itself is comparably well positioned. Finally, latest profit reports are positive.

The tl;dr of the tl;dr: Unicredit is by all reasonable measures not "being just an inch from being bankrupt". They're in trouble, like several other big European banks, but unless you expect the EU banking system  to collapse entirely over night (hint: it won't), I don't see Unicredit go bankrupt either without further warning signs.

That's not exactly what dollar cost averaging means, but... okay.

I can't really see such a total reversal in confidence (and corresponding drying up of buying pressure) which would be necessary to see us fall back below 80 in the near future, but then again, you've been right before with your long-term prognoses. Skeptical as I am about EW theory, you're my favorite evangelist for that subject :D

EDIT: sp

So much uninformed opinion in here. Bitstamp's bank is a subsidiary of Unicredit SpA, a global Italian bank. While not without problems, Unicredit (or its subsidiaries) are as far from going belly up as most other big European banks, in other words: not very likely to do so in the near future.

Lots of snark in this thread, although there's actually a pretty simple answer to your question. It sounds like you're not interested in daytrading, i.e. watching price movement on a very fine-grained level, but that you have originally been going for a buy&hold strategy, and then cashed out perhaps a bit too early.

So, assuming you want to continue where you left, i.e. you want to resume buy&hold, but also want to avoid buying in at an unrealistic entrance level, there are two rather obvious options:

(a) if you assume price currently is unrealistically high and will correct down soon, Dollar cost averaging is your friend.

(b) if current price is more or less stable, and will continue to rise from where we are now, Dollar cost averaging is still an option, but buying-in immediately would perform better.

So there's your answer. Determine whether (1) you think price right now is too high, or about right, and (2) how willing to take a risk/risk averse you are. If you think the current price is more or less correct, or you're relatively willing to take a risk, buy-in now, or better: over the course of the next weeks, to spread the risk a bit. If you're more cautious and/or think price is too high, use DCA.