Quite often I read naive posts on this forum like this:
* Bitcoin will make rich people richer.
The establishment is always looking for investment options and they don't mind loosing a couple thousand bucks. Besides some early adopters Bitcoin will mostly make rich people richer as only they can do high risk investments. The advantage of this is that they will also lobby governments and banks.
If bitcoin will make things more transparent and thus pave the road for political solutions I for my part will be happy.
To get back to the original topic this was something discussed yesterday with my fellow geo-libertarians at the LibDem spring conference in Brighton...*
There are some rich folk who will, just by buying and holding Bitcoin, become richer. However, they are likely to be only the tech-savvy rich who are prepared to spend the time studying Bitcoin and only those who are prepared to risk some of their wealth are likely to do so.
I doubt very much that a significant proportion of early adopters (even if we include today's adopters) are in the wealthiest 5% though this may change soon. And Bitcoin would not be where it is today in terms of distribution were it not for the early adopters who did spend/invest/give away a load of their coin. I am getting the impression from discussions on these boards (and having an idea of the source of the Bitcoin I am buying locally) that some early-amassed wealth is gradually being fed into the active Bitcoin economy.
Some of those I was talking to yesterday would ideally like to see the seignorage of a currency going to the 'commons' in the same way that land tax would. However my argument was that this could only occur if it was a government controlled currency people were coerced to use. With Bitcoin the cat is out of the bag. If there are currencies that work well and don't require the government then why get governments involved at all? Even though Hayek, Keynes and Marx all missed the significance of land in their theses I think Hayek was right on this competitive currencies.
In the narrowest sense we could say the 'seignorage' of Bitcoin is the miner's profit but personally I think they have earned it and does not belong to the 'commons'. But the main task of distribution lies with those who own and use Bitcoin so in a way we could say the consequent increase in value to early adopters is also 'seignorage'. I tend to think Bitcoin would not be catching on as it is were it not for that. People might think it was a good idea but leave it until another day until others have tried it were it not for the likelihood that it will cost more tomorrow. And if enough people did that it would have died. I also think people would be much less likely to rave on about it to their friends and family (of course primarily extolling its virtues etc.) were they not also enjoying watching the value of their own holding relative to fiat increasing month by month.
I don't think the way the early adopters including me with my five-month involvement 'deserve' for having bought when we did and for talking about it with others and being involved, the wealth we're likely to be holding in a few short years. Yet I think it was a necessary part of the design. Without it widespread Bitcoin adoption would not happen I think**. In a way the increase in value is to Bitcoin what porn was for the internet! In the mid 90s I was tutting those who slowed the internet down with images (like people are criticising SD 'spamming' today). I thought it was a serious tool for the future of mankind for serious discussions to dispel myth and accelerate the discovery and distribution of knowledge. But if porn hadn't come along I really can't see the internet would have taken off as it did in the ten years that followed. I believe that is why it ended up in most people's households. There may have been all kinds of noble and practical reasons people gave themselves and others for getting on board but it may never have happened without that little secret excuse to do it today rather than tomorrow! Likewise with the increase in value of Bitcoin
As for Bitcoin solving all problems I don't think so*** - there's the land problem for one - but it takes us a darn sight closer
*Yes, I know, sounds bizarre doesn't it - but it was good
**maybe we should thank the likes of the freicoin folks for doing a control for this experiment. It will be interesting to see.
*** but then neither does anything else on its own. But there may be a family of solutions...