Why Satoshi did minting RIGHT

[tiberiandusk]

I do not think Satoshi did minting right, because of the many issues that it brings:

• Not all coins are created equal; i.e. bitcoins are not truly fungible: PPPool or Eligius coins are worth less than solo-mined coins

Wut?

[dree12]

Very early adopters are unfairly rewarded (I admit I am in this category); indeed, this slows adoption in the middle and later phases of adoption

But that truth holds for every other SUCCESSFUL project which ends up in an IPO.
You NEGLECT to mention all the other projects which bite the dust in the meantime. Then being a very early adopter means you lost your investment (time and money, maybe some opportunity cost as well).
So just like ABBA sings... the winner takes it all. So you should complain about life - not about bitcoin.

Turns out the minting algorithm seems to be specifically important to attract miners and secure the network. So the reward SHOULD be proportional to the state of security of the network:
- if the security is low: throw out big rewards
- if the security is high: throw out small rewards

That is indirectly achieved in bitcoin through the competition effect. Also, it is interesting to see that PPcoin adds another aspect to that equation: the reward is a function of difficulty.
So miners are even more rewarded in case the difficulty of ppcoin drops to critical levels!

I do not neglect to mention all the other projects which bite the dust. As an early adopter myself, I can state with certainty that I took the risk and I should deserve the reward. Unfortunately, our rewards do slow down middle and late stage adoption. This is not optimal.

[Jutarul]

I do not neglect to mention all the other projects which bite the dust. As an early adopter myself, I can state with certainty that I took the risk and I should deserve the reward. Unfortunately, our rewards do slow down middle and late stage adoption. This is not optimal.

I see. This suggests that there might be a dilemma:
- Bigger rewards make sure people engage early on in risk and secure the network. But it discourages followers.
- Smaller rewards makes sure that people who come later receive a greater piece of the pie, but it may be more difficult to get the cryptocurrency off the ground.

So adoption "fairness" is an important characteristic of the minting logic. That's why the first thing I did when I looked at ppcoin was the reward scheme. But the question is, how do you quantify "fairness"?

[sunnankar]

It was not even logic; it was my opinion on morality!

Don't make a premise for an argument unless you can back it up with logic.

A rational counter could have been: "Someone ELSE, COULD have created Bitcoin, Satoshi is nothing special"

I don't need to counter a fallacy with anything.

That is not emotion, if Bitcoin stops a war or other wasteful spending that is good seen from many points of view - not just emotional.

Appeal to consequences.

Why SHOULDN'T we appeal to emotion?

Because it means you aren't appealing to reason. If I want to deal with religious fervor I can go to church.

[flower1024]

As we know Satoshi decided to halve the block reward every ~4 years which leads to something of a ponzi-like early distribution. Morally I don't think there is anything wrong with this:

why is the distribution ponzi-like?

ponzi would imply that any investment is used to pay old investments. which is not true.

what you (probably) meant: early investors gets more. thats ok as they took/take a huge risk.

btw: last winter the difficulty was lower than the summer before that.

[FreeMoney]

I find it hilarious that the same people who complain about Bitcoin's early adopter "advantage" are those who also complain about Bitcoin's price deflation.

The price deflation means that everyone gets an early adopter advantage, until the growth in Bitcoin adoption stops. And that may only happen when the world's population stops increasing.

Probably not even then since we'll likely still be getting more efficient.

[Ailure]

I tried out bitcoin early on, then I realized I couldn't do much with it and dropped it. Now I regret not mining early on in hindsight.

But I personally think we're still in a early adopter phase.

[Realpra]

Appeal to consequences.

I don't know whose side you are on sunnankar, but when we can't "appeal to consequences", then we go into ga-ga-land. (I hope etlase realizes that cause-effect is like ALL of science)

Guess I can't tell my kid not to touch the hot stove either, pain is emotion right? Burns are consequences right? Can't base statements on that, no sir!!!

(oh right shoot my analogy is a strawman or "false" right? Guess etlase is always right no matter what, now that's some axiomatic logic!)

.... Unfortunately, our rewards do slow down middle and late stage adoption. This is not optimal.

Why do you think so?

I mean if you personally hold a large part of all BTC ever to come, don't you have the largest conceivable incentive to spread the word?

Yes later adopters might disapprove of your advantage over them at some level, BUT Bitcoin is useful to everyone and hence the main barrier to adoption is that people simply haven't heard about it or understood it - at least that is my assumption.

What do you consider the greatest obstacle; information spread about BTC or lower rewards to later adopters?

As we know Satoshi decided to halve the block reward every ~4 years which leads to something of a ponzi-like early distribution. Morally I don't think there is anything wrong with this:

why is the distribution ponzi-like?

Well I was thinking more of pyramid schemes where; the more suckers you can get in, the more you get yourself. Its very much similar to a ponzi though and for sure many pirate "investors" were very vocal supporters.

BTC get more valuable the more that join, which is ponzi-like, although in Bitcoin's case the value increase is legit and due to increased economic efficiency.

[Dalkore]

I laugh everytime I read ponzi or pyramid mention when talking about Bitcoin.  

Its a fixed asset that had a lower value when it was launched then today.  No one could predict it would gather the confidence and widening support as it does today.  What is great is people's greed will finally dislodge the early coins once the price gets high enough that they decide to sell their coins.

[Jutarul]

BTC get more valuable the more that join, which is ponzi-like, although in Bitcoin's case the value increase is legit and due to increased economic efficiency.

Don't confuse ponzi with network effects. Facebook isn't a ponzi but its value increases every time a new user signs up.

[tiberiandusk]

Gold prices are rising. PONZI!

[allthingsluxury]

The bitcoin system is great. I am a huge believer in gold and silver and this certainly has some of those qualities. Anything is better than pure fiat funny money.

[🏰 TradeFortress 🏰]

I would like to add that we are the early adopters.

People should either invest NOW or stfu tomorrow once bitcoin reach 10.000$ 

Agreed.. we are early adopters.

[Come-from-Beyond]

I would like to add that we are the early adopters.

People should either invest NOW or stfu tomorrow once bitcoin reach 10.000$ 

Agreed.. we are early adopters.

I bet for that 10.000$ u won't buy even a bottle of nuka-cola.

[Realpra]

BTC get more valuable the more that join, which is ponzi-like, although in Bitcoin's case the value increase is legit and due to increased economic efficiency.

Don't confuse ponzi with network effects. Facebook isn't a ponzi but its value increases every time a new user signs up.

Gold prices are rising. PONZI!

But Bitcoin has a reward system that explicitly rewards earlier adopters.

I'm willing to bet that there is no reward to a person signing up on facebook first and that half the worlds gold did not become available between 1000 and 1004 AC.

I'm not saying it's a ponzi, only that the BTC minting system has a pyramid shape.

[Jutarul]

I'm willing to bet that there is no reward to a person signing up on facebook first ...

You're not the one to keep the reward. It's Mr. Zuckerberg and others.

[Realpra]

I'm willing to bet that there is no reward to a person signing up on facebook first ...

You're not the one to keep the reward. It's Mr. Zuckerberg and others.

With BTC you are the one that keeps the reward and you are also often the promoter - that is similar to pyramid/ponzi schemes.

Anyway this is completely off-topic as I never said BTC was a ponzi dammit only ponzi-LIKE in the way the first coins were distributed. It was just the word I chose, it could have been "IPO-like", "stock-like" or "pyramid-shaped".

[Adrian-x]

I'm willing to bet that there is no reward to a person signing up on facebook first ...

You're not the one to keep the reward. It's Mr. Zuckerberg and others.

With BTC you are the one that keeps the reward and you are also often the promoter - that is similar to pyramid/ponzi schemes.

Anyway this is completely off-topic as I never said BTC was a ponzi dammit only ponzi-LIKE in the way the first coins were distributed. It was just the word I chose, it could have been "IPO-like", "stock-like" or "pyramid-shaped".

I think he got it almost perfect; I think it would be improved if the distribution was optimised to benefit the early adopters of Bitcoin.  

[Sunny King]

Turns out the minting algorithm seems to be specifically important to attract miners and secure the network. So the reward SHOULD be proportional to the state of security of the network:
- if the security is low: throw out big rewards
- if the security is high: throw out small rewards

That is indirectly achieved in bitcoin through the competition effect. Also, it is interesting to see that PPcoin adds another aspect to that equation: the reward is a function of difficulty.
So miners are even more rewarded in case the difficulty of ppcoin drops to critical levels!

Yeah I made it that way to experiment whether it would help stabilize hashrate a little bit more for alter chains. In fact it might help proof-of-work chains more than it does to ppcoin, as ppcoin does not depend on hashrate for security.

As to Satoshi's minting design I think it's good enough as he had a lot more important things to deal with. Two things are crucial to his mint design:
1) Money supply is capped/fixed so people can have confidence with the first crypto-currency.
2) Early adopters are rewarded nicely so Bitcoin gets started.

So Bitcoin got started successfully I'd say he accomplished all he needed to with the mint design. Maybe not perfect who knows, but already a job well done to me.

Folks should give more credit to Satoshi what he did is a monumental task. I wrestled with bitcoin design and code in order to create ppcoin, so I understand how hard it was to create Bitcoin. Satoshi is like the Einstein of crypto-currency, we should all thank him for bringing the gift of cryptocurrency to humanity.

[Adrian-x]

As to Satoshi's minting design I think it's good enough as he had a lot more important things to deal with. Two things are crucial to his mint design:
1) Money supply is capped/fixed so people can have confidence with the first crypto-currency.
2) Early adopters are rewarded nicely so Bitcoin gets started.

So Bitcoin got started successfully I'd say he accomplished all he needed to with the mint design. Maybe not perfect who knows, but already a job well done to me.

Folks should give more credit to Satoshi what he did is a monumental task. I wrestled with bitcoin design and code in order to create ppcoin, so I understand how hard it was to create Bitcoin. Satoshi is like the Einstein of crypto-currency, we should all thank him for bringing the gift of cryptocurrency to humanity.

Einstein was maybe more gifted in I find his ideas beautifully insightful but Satoshi's invention is revolutionary, it will save the world.

Re point 2. 50% of coins are mined, and 99% of early adopters haven't even heard of Bitcoin yet. This thing needs to scale and a few thousand people owning half the money in the world is going to severely hamper growth. I love the gold analogy, I wish Bitcoin would have followed it more actualy. Gold was not mined in abundance in the prehistoric times it came in slowly and will go out slowly.

The minting rate proposed above, would take a few years to generate any volume. But by the time Bitcoin sees growing pains the masses will still be encouraged to get involved in the system. 

As discussed elsewhere I see a problem with deflation affecting adoption.