Distribution of bitcoin wealth by owner

[AnonyMint]

Bitcoin's only intrinsic value is confidence. So "weak hands" will mean strong hands, and vice versa at some point in the future if I am correct.

An interesting metric would be: what percentage of coins are in the hands of people, for whom the holding represents X% of portfolio.

Probable answer:

Gonzalo Lira explains why anonymity is so important but Bitcoin doesn't have it.

Also, actually acquiring bitcoins is remarkably complex—and completely negates the supposed anonymity of bitcoin. Here’s a Reddit editor discussing how tough it was for him to get bitcoins, which is fairly typical of retail customers: A whole lot of hassles, and he still couldn’t buy any. And for all the talk of “bitcoin’s anonymity”, you need a whole truckload of verifiable documents making clear who you are in order to buy your first bitcoin. So the bitcoin-anonymity argument is a chimera.

The failure to meet that condition—“buy or sell exclusively and necessarily with bitcoin”—is what makes bitcoin essentially useless.

Data taken from http://blockchain.info/charts

In the past 60 days bitcoin market price has increased by 8000%. If the cause of increase was widespread adoption of bitcoin as a currency, people would be making transactions. The number of transactions would increase by a similar percentage taking it to around 300000 transactions per day. The current number of transactions is around 75000 per day.

My take from the data is that bitcoin is in a massive speculative bubble. People are hoarding and not using bitcoin as a currency.

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[AnonyMint]

Rpietila, so you are saying that new made bitcoin millionaires have the power to do wonderful things for the world if I understand you correctly. What makes you think that these millionaires will be different than old school millionaires?

Very loaded question, as the majority of old-world millionaires are pretty much regular people. I'd call this a false choice. (In addition to the obvious answers you will get from this forum, asking you to consider the demographic likely to have stumbled into large BTC holdings -- i.e. engineers, tech-minded folks, cryptonerds and others with strong libertarian tendencies on average.) Again, either the division of the monetary policy in the US pushed you above middle class, or below it. It's the banking cartels and conglomerates, controlled also largely by brainwashed and clueless but regular people who genuinely believe that things are as they are through the magic of capitalism and hard work. Very greedy few at the very top deliberately make the policies that have caused these problems. Everyone else is mostly guilty by not paying enough attention to stop it.

The beauty of a cryptocurrency such as Bitcoin, where the key attributes for this are no/negligible remission and transaction costs and a fixed-supply, is its ability to undermine a huge swath of the traditional tricks in the bankster playbook for siphoning the world's GDP delta. As the world GDP is around 4 or 5% annually, with a fixed currency you could expect holdings (literal holdings) to gain that amount in purchasing power. As it is, our inflation is pegged deliberately at 3%, and may be more since we can't verify this -- and it is more in many countries, and is almost never less (Japan is near the bottem, as they have chosen 1.5% in the recent depressing decision to go inflationary due increasing difficulty competing in trade with countries artificially-boosting their currencies).

Q.E.D., anyone in the US not making an average of at least perhaps 8%, maybe more, on their net worth, is invisibly bleeding money to this deliberate black hole. Ergo, I fully expect BTC to appreciate at a minimum of this amount vs. USD. This assumes the supply-demand ratio remains unchanged (currently demand increases are far outweighing supply increases, which themselves of course are an ever-decreasing function). This also ignores any actual devaluation of USD which may become a factor soon as well.

For these reasons, it is an astronomically poor and uninformed economic decision to not hold BTC as your store of value, and conduct the maximum possible amount of commerce in that currency. I hope we see an explosion of solutions like Coinkite and "reloadable" debit cards (working on the latter myself with the ol' think tank) to permit the ease of users only converting to fiat when necessary and at the last possible minute.

I have an entirely different viewpoint. I think capital is dying by 2033. I don't think there is any level of gain that will cross the chasm to 2033.

Still applicable, and will be applicable for a while. I mean, some economists have written on this as early as 2003, so this is not so hot news to those who followed recent developments.

I think my unique insight (which those others did not publish) is that finance and capital itself is losing relevance as the fixed capital industrial age dies.

I am asserting that storing money won't be as valuable an activity any more, because top-down money can't buy knowledge. Unlike manual labor, knowledge is not fungible from person-to-person, thus it can't be bought. It spawns from accretive, bottom-up activity.

http://unheresy.com/Information%20Is%20Alive.html#Thought_Isn't_Fungible

I agree with the 'can't buy knowledge' part. Internet has made the cost of most knowledge almost free or next to nothing, something that people in the pre-internet era couldn't dream of. Hopefully these large amounts of knowledge available can bring some quality changes.

Nothing is free. Everything has a cost of human time. What you mean is the access to information is more open thus more freedom. Freedom and openness is not the same as free meaning no cost.

That is part of the rationale of why Eric S Raymond proposed the name "open source" instead of "free software".

Freedom of information publishing and access enables the division-of-labor to increase, i.e. for expertise to become more focused. Which increases the collective knowledge of society, trade, and prosperity, but this is not the same as the knowledge is free.

The purpose of money is that it enables me as an expert programmer to trade with an expert surgeon without finding a patient who needs both surgery and custom programming to act as our intermediate barter.

So we will see money moving more towards its primary function as a medium-of-exchange with short-term store-of-value and less of as a long-term, hard-on store-of-value. Why? Because knowledge workers crave knowledge more than money, because they can't buy the NEW knowledge they want with money, even if they tried. I explained why new knowledge can't be created out-of-thin air at ANY PRICE in the following linked section.

http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#FinanceabilityofKnowledge

I expounded on that in 2013:

http://unheresy.com/Information%20Is%20Alive.html#Knowledge_Anneals

Degrees-of-freedom is potential energy. I will go find my writings and research on that from my copute.com


http://copute.com/index.html.orig

Higher-Level
| Degrees-of-Freedom

The more degrees-of-freedom...

Loans baby. We love loans.

Private banks didn't have a central bank in the 1800s. That came later as the private banks were often failing and taking the USA into depressions too often. Rollercoaster.

Loans are moving the economy for sure and banks keep on failing even with a central bank being established.

With the central bank often bailing troubled banks out (not considering whether it's good in the long term on the economy scale). And in many countries money in the deposits of individuals is often insured to some extent too. Obviously, the situation is much better now than it was in the 19th century...

The central bank means the multiple smaller bank runs and depressions of the 19th century (1800s) will be delayed into one HUMONGOUS apocalyptic TBTF failure coming before 2024 and lasting through 2033.

We just bound ourselves together in one-for-all-and-all-for-one to delay the correction. So the correction will be one-for-all-and-all-for-one.

Have you ever tried to move a huge crowd in lockstep with zero degrees-of-freedom (in an analogy of the financial derivatives of mass destruction which have enabled debt to rise unabated to 300+% of the global GDP) as if all of their shoestrings were tied to all others? There is only one way, dead.

I expounded on degrees-of-freedom.

[traderCJ]

So we will see money moving more towards its primary function as a medium-of-exchange with short-term store-of-value and less of as a long-term, hard-on store-of-value. Why? Because knowledge workers crave knowledge more than money, because they can't buy the NEW knowledge they want with money, even if they tried. I explained why new knowledge can't be created out-of-thin air at ANY PRICE in the following linked section.

You're making a lot of assumptions here.  First you seem to be saying that "we will see X", meaning (I assume since your prose is not precise) that generally we will see X, where X is investors seeking anything but long term investments.  Your justification for this statement is related to "knowledge workers".  Thus, you seem to assume that generally, knowledge workers determine what is generally sought after.  I'd like to see supporting evidence for this.  It assumes that knowledge workers dominate the economic spectrum and that those workers prefer knowledge gains rather than long-term economic gains.  This is pure speculation.  I don't relate to this sentiment.  As a knowledge worker myself (I think this term is too blunt, but whatever), long term investments are still extremely attractive due to the inherent shakiness of fiat currencies.  Also, you seem to ignore a large portion of our aging population which is interested primarily in long-term investments, rather than short term.  Finally, you don't mention the role that inflation has in preferring short term to med/long term investment.

[Zangelbert Bingledack]

Risto's 17% average rake finding puts a new spin on the "couldn't the old rich just buy up all the bitcoins?" question. Of course they cannot, but the 17% rake should help quantify how much they could actually get if they started buying now.

[AnonyMint]

Risto's 17% average rake finding puts a new spin on the "couldn't the old rich just buy up all the bitcoins?" question. Of course they cannot, but the 17% rake should help quantify how much they could actually get if they started buying now.

That assumes they see any advantage to buying BTC. If they believe it is a Ponzi bubble and if they are correct, they have no need to buy it.

[AnonyMint]

Tinfoil alternate theory I now posit (which should hold at least as much credibility as the above-referenced study): The Winklevii are Satoshi Nakamoto, but their over-trust in Zuckerberg taught them their lesson on how not to create and release virally-adopted technologies

From one NWO viral strategy to the next. Facebook has a very clear purpose towards the 666. Mandatory face recognition. Soon mandatory facebook accounts. Mandatory tracking of every movement with your mobile geolocation tied into facebook, google, etc.

http://www.activistpost.com/2013/11/social-logins-for-government-services.html

http://www.nestmann.com/the-nsa-has-nothing-on-these-guys

http://www.nestmann.com/the-war-on-privacy-is-coming-to-a-license-plate-near-you

As for Bitcoin's badness and role. Read the archive of my posts.

[AnonyMint]

Presumably if you are that rich of an insider, you already own the exchange too. You created an exchange because it was insane not to.

What would prevent a competitor from buying coins from you on your own exchange.

Exchange-owned Sybil identities to hit the government imposed limits in favor of the owner of the exchange.

When the access is very limited as it currently is with exchanges, this tells you that Bitcoin is a fraud.

I know the solution to this, it is a CPU-only coin and anonymity, so we don't need exchanges so much.

[AnonyMint]

So we will see money moving more towards its primary function as a medium-of-exchange with short-term store-of-value and less of as a long-term, hard-on store-of-value. Why? Because knowledge workers crave knowledge more than money, because they can't buy the NEW knowledge they want with money, even if they tried. I explained why new knowledge can't be created out-of-thin air at ANY PRICE in the following linked section.

You're making a lot of assumptions here.  First you seem to be saying that "we will see X", meaning (I assume since your prose is not precise) that generally we will see X, where X is investors seeking anything but long term investments.  Your justification for this statement is related to "knowledge workers".  Thus, you seem to assume that generally, knowledge workers determine what is generally sought after.  I'd like to see supporting evidence for this.

I documented in the thread from which those quotes originate. You can click the link on a quote to go to thread (and post) where it comes from.

Specifically a recent Oxford study predicts 45% of all existing jobs will be lost to automation by 2033. This confirms we are in a period of radical technological unemployment. This appears to happen every 78 years. The difference is this time we are all tied together in socialism by central banks. You can re-read my quotes from the prior post to weigh the gravity of this thud of a realization.

It assumes that knowledge workers dominate the economic spectrum

Agreed. And they already do. Look what Satoshi did. Watch what I do to Bitcoin as one man.

and that those workers prefer knowledge gains rather than long-term economic gains.

You seem to miss the point that they have no choice. Do you not realize why?

Let me give you an example. Right now I challenge any one to go buy a CPU-only coin design before I release mine.

You can't. Only I know how to make one.

Knowledge that we need doesn't generate from capital. It generates from serendipity and fitness of diverse humans matched up to diverse needs.

We only needed capital when our needs were primarily fixed investment, e.g. factory buildings, factory machines, etc.

The 3D printer and the computer ends that.

The next 20 years will be so radical of change, you will think you live in Jetson's world by 2033. Flying cars, etc.. all manufactured by a guy on a computer.

This is pure speculation.  I don't relate to this sentiment.

It will be a difficult adjustment for most people. They will futilely resist. As was the case for the Luddites in the Industrial Revolution. We are in the First Computer Revolution. Second will be quantum computing.

[8fold]

@AnonyMint I've noticed you mentioned the year of 2033 several times. Why 2033?

[farfiman]

The next 20 years will be so radical of change, you will think you live in Jetson's world by 2033. Flying cars, etc.. all manufactured by a guy on a computer.

http://www.youtube.com/watch?v=GJjUVIIYptE

[Rival]

"The dreams of a poor man are not the dreams of a rich man. It is because of this intrinsic truth that providing wealth to a poor man can potentially be considered an attempt to murder him."

[rpietila]

"Wealth that is earned, increases happiness of the earner. Wealth that is received, does not."

[BitChick]

"Wealth that is earned, increases happiness of the earner. Wealth that is received, does not."

Wealth from Bitcoin feels like I am just "receiving" instead of "earning" it though at this point.

[BitChick]

Tinfoil alternate theory I now posit (which should hold at least as much credibility as the above-referenced study): The Winklevii are Satoshi Nakamoto, but their over-trust in Zuckerberg taught them their lesson on how not to create and release virally-adopted technologies

From one NWO viral strategy to the next. Facebook has a very clear purpose towards the 666. Mandatory face recognition. Soon mandatory facebook accounts. Mandatory tracking of every movement with your mobile geolocation tied into facebook, google, etc.

http://www.activistpost.com/2013/11/social-logins-for-government-services.html

http://www.nestmann.com/the-nsa-has-nothing-on-these-guys

http://www.nestmann.com/the-war-on-privacy-is-coming-to-a-license-plate-near-you

As for Bitcoin's badness and role. Read the archive of my posts.

The number 666 is already on all of the bar codes used in the world.  (there are two lines at the beginning, middle and end without any number written under them but they are the same as a 6 on the second half of codes with the number 6 in them.)

I think Bitcoin is not the problem.  It will be the AntiChrist that takes power and then mandates everyone to get a barcode on their hand or forehead to buy or sell at places so that their purchases can be tracked and then taxed.  Bitcoin could contribute to the reason why a leader decides to do that though.

I have been thinking lately that the "Beast" described in Revelation could be the Internet and that the 7 heads are the 7 continents and that the one head that suffers a blow could be the US.  This, of course, could just be my imagination run wild.  But it is a thought.

[macsga]

I just saw this post and (even if I'm a regular here) I came through a google search. I have to congratulate you rpietila for the great thread and devotion to this thing. Even if you're on the North and I'm on the South of EU, I feel I want to offer a beer when we meet. Cheers.

[vokain]

Tinfoil alternate theory I now posit (which should hold at least as much credibility as the above-referenced study): The Winklevii are Satoshi Nakamoto, but their over-trust in Zuckerberg taught them their lesson on how not to create and release virally-adopted technologies

From one NWO viral strategy to the next. Facebook has a very clear purpose towards the 666. Mandatory face recognition. Soon mandatory facebook accounts. Mandatory tracking of every movement with your mobile geolocation tied into facebook, google, etc.

http://www.activistpost.com/2013/11/social-logins-for-government-services.html

http://www.nestmann.com/the-nsa-has-nothing-on-these-guys

http://www.nestmann.com/the-war-on-privacy-is-coming-to-a-license-plate-near-you

As for Bitcoin's badness and role. Read the archive of my posts.

The number 666 is already on all of the bar codes used in the world.  (there are two lines at the beginning, middle and end without any number written under them but they are the same as a 6 on the second half of codes with the number 6 in them.)

I think Bitcoin is not the problem.  It will be the AntiChrist that takes power and then mandates everyone to get a barcode on their hand or forehead to buy or sell at places so that their purchases can be tracked and then taxed.  Bitcoin could contribute to the reason why a leader decides to do that though.

I have been thinking lately that the "Beast" described in Revelation could be the Internet and that the 7 heads are the 7 continents and that the one head that suffers a blow could be the US.  This, of course, could just be my imagination run wild.  But it is a thought.

oh God, I'm reading Behold a Pale Horse right now and this is all connecting before my eyes. See you on the other side, my friend, for better or for worse...

[BitChick]

Tinfoil alternate theory I now posit (which should hold at least as much credibility as the above-referenced study): The Winklevii are Satoshi Nakamoto, but their over-trust in Zuckerberg taught them their lesson on how not to create and release virally-adopted technologies

From one NWO viral strategy to the next. Facebook has a very clear purpose towards the 666. Mandatory face recognition. Soon mandatory facebook accounts. Mandatory tracking of every movement with your mobile geolocation tied into facebook, google, etc.

http://www.activistpost.com/2013/11/social-logins-for-government-services.html

http://www.nestmann.com/the-nsa-has-nothing-on-these-guys

http://www.nestmann.com/the-war-on-privacy-is-coming-to-a-license-plate-near-you

As for Bitcoin's badness and role. Read the archive of my posts.

The number 666 is already on all of the bar codes used in the world.  (there are two lines at the beginning, middle and end without any number written under them but they are the same as a 6 on the second half of codes with the number 6 in them.)

I think Bitcoin is not the problem.  It will be the AntiChrist that takes power and then mandates everyone to get a barcode on their hand or forehead to buy or sell at places so that their purchases can be tracked and then taxed.  Bitcoin could contribute to the reason why a leader decides to do that though.

I have been thinking lately that the "Beast" described in Revelation could be the Internet and that the 7 heads are the 7 continents and that the one head that suffers a blow could be the US.  This, of course, could just be my imagination run wild.  But it is a thought.

oh God, I'm reading Behold a Pale Horse right now and this is all connecting before my eyes. See you on the other side, my friend, for better or for worse...

Better or for worse?  I guess it will just depend what side we are on.    I get a lot of persecution for my faith but I sleep well at night knowing that regardless of what happens in this world or what kind of difficult things are coming in the future, God is in control and it will all work out in the end.  That said, I will NOT be accepting any barcode on my hand or forehead.  

Edit:  I looked up the book, "Behold a Pale Horse" on Amazon.  Looks interesting.  I will have to read it!  Thanks.

[AnonyMint]

I am not into the 666 biblical thing. I just want to stop the bastards such as the Bush clan, Hillary Clinton, Dianne Feinstein, NSA, etc from taking away my freedom.

farfiman, I've read that in the 1920s the Americans thought they'd entered a nirvana as they had been transformed in a matter of decades from an agrarian life with horses, lanterns, stage coaches communication to an industrial one with cars, radio, electricity, radio, etc..

The Second Industrial Revolution (which came as a result of the network effects of the First Industrial Revolution) caused massive technological unemployment, yet of course it also raised the standard-of-living and eventually created many more higher-skilled jobs. If we trace history, we can see this pattern repeating every 78 years = 3.1459 x 26 year maturity generations. Before the First Industrial Revolution were two soil technology revolutions which transformed agrarian productivity and caused massive unemployment.

8fold, there seems to always be a major war during each of the depressions caused by these periods of massive technological unemployment. 78 years before War World 2, was the US Civil War.

Any way, 1929 + 78 = 2007 (the year the real-estate bubble burst in USA and PIIGS and the depression started, the depression which is currently dead-cat bouncing and many are mistaking this for a recovery). The downturns typically have a duration ranging between 26 to 31.459 years. I was amazed when a recent Oxford study predicted a loss of 45% of existing jobs to automation within 20 years, i.e. by 2033.

Rival and rpietila, indeed the rich (in stored claims on manual, fungible labor) man can't generate knowledge. The poor (in useless stored claims on manual, fungible labor) can generate knowledge. The rich fool is just a usury (loans, bonds, dividends, hard-on money, and ponzi pump & dump) parasite, and I believe the knowledge revolution will destroy his ability to parasite on society and boast about it. I intend to be part of that, hopefully coming to a Bitcoin theater near you this holiday season.

Note this process isn't likely to be 100% complete ever, and certainly not even 50% complete any time soon. So stored capital remains useful for the meantime and will diminish but not entirely disappear in my lifetime. For example, the bastards still have their cartel on the energy we need to produce knowledge with (although we continue improve the efficiency of our gadgets, cars, etc).

rpietila, we can't give away knowledge. I have tried to give away my knowledge and I can't even force it down the readers' throats. Knowledge is impossible to bottle up and distribute. Knowledge is dynamic, diverse, spawns from fitness as motivated by the diverse situations that humans encounter.

Revenues will scale down with less required capital stock, due to lower costs of producing knowledge (only need a computer and home office). Thus more massive deflation ahead.

Large capital is going to running around trying to find a home, but it will be difficult to find economies-of-scale. The best investments will be very tiny.

[Rassah]

An interesting metric would be: what percentage of coins are in the hands of people, for whom the holding represents X% of portfolio.

Probable answer:

Gonzalo Lira explains why anonymity is so important but Bitcoin doesn't have it.

Also, actually acquiring bitcoins is remarkably complex—and completely negates the supposed anonymity of bitcoin. Here’s a Reddit editor discussing how tough it was for him to get bitcoins, which is fairly typical of retail customers: A whole lot of hassles, and he still couldn’t buy any. And for all the talk of “bitcoin’s anonymity”, you need a whole truckload of verifiable documents making clear who you are in order to buy your first bitcoin. So the bitcoin-anonymity argument is a chimera.

The failure to meet that condition—“buy or sell exclusively and necessarily with bitcoin”—is what makes bitcoin essentially useless.

That bitcoin is not anonymous as the edges where it interacts with fiat is not a secret, nor a problem. As soon as you get your money into bitcoin, you can make it completely anonymous rather easily.

[Rassah]

Presumably if you are that rich of an insider, you already own the exchange too. You created an exchange because it was insane not to.

What would prevent a competitor from buying coins from you on your own exchange.

Exchange-owned Sybil identities to hit the government imposed limits in favor of the owner of the exchange.

When the access is very limited as it currently is with exchanges, this tells you that Bitcoin is a fraud.

I know the solution to this, it is a CPU-only coin and anonymity, so we don't need exchanges so much.

So the attacker sells a lot to make the price crash, then runs up the limit, making it impossible for anyone else to buy or sell for a while? I'm missing something.

Regarding your solution, how would people convert into that currency without an exchange?