Bitcoin and wealth redistribution, ad absurdum.

[Imahara]

The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.


Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.

Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.


Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.

[Siegfried]

The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.


Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.

Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.


Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.

Yes, and it will be quite interesting to watch, especially to see which of the elites successfully acquired the new wealth asset and those who did not.

[Alpaca Bob]

The world is seeing the introduction of a new currency. To understand what this can do, it is useful to look at the 'ad absurdum' argument of radically changing the currency asset.


Imagine a pretty island economy. Everyone goes about their business as usual. For as long as people remember they have been using black shells as their currency. Some people that have worked hard and done well have hoarded socks full of the black shells. They feel pretty secure they can live out their lives wanting for nothing.

Now shock horror! The people of our island wake up the next day and suddenly only white shells are accepted in the economy. People still working can expect to be paid in the new white shells and life will go on pretty normal for them. But those people that had hoarded the black shells can find themselves poor overnight. And other people that just happened to live on top of a pile of formerly useless white shells are the new wealthy elite.


Bitcoin has the potential to create a big change the worlds wealth distribution. Like a reshuffling of the cards. But don't expect those with a big stash of the old currency to take it lying down. Soon they will realize a switch is going on, and they will rush to get into the new wealth asset. This will be the great tipping point where the future distribution of wealth is decided.

Yes, and it will be quite interesting to watch, especially to see which of the elites successfully acquired the new wealth asset and those who did not.

http://www.reactiongifs.com/wp-content/gallery/popcorn-gifs/tumblr_ljh0puClWT1qfkt17.gif

[zeroday]

It's just evolution. More adaptive beings survive to replace obsolete dinosaurs.

Humble geeks with agile minds will replace confident dandies with agile mouths.

[slikes]

Your argument relies on the postulate that Bitcoin is going to become a global standard. There isn't anything coercing the world economy into adopting Bitcoin. On the other hand, "those with a big stash of the old currency" already have enough wealth that they could prevent Bitcoin's widespread adoption.

[Imahara]

Well, ad absurdum, as in, in the crazy extreme of what could happen. Halfway would be pretty seismic as well. And some very powerful industries tried to stop p2p file sharing, they couldn't. Any individual more powerful than a whole industry?

Your argument relies on the postulate that Bitcoin is going to become a global standard. There isn't anything coercing the world economy into adopting Bitcoin. On the other hand, "those with a big stash of the old currency" already have enough wealth that they could prevent Bitcoin's widespread adoption.

[AnonyMint]

Well it is clear that you feel you are more deserving than the elite, but the fallacy is why do you assume they will adopt your limited hangout and not just destroy or co-opt it instead. I have already detailed how they can do this, just read through my posts over the past 3 weeks.

[501]

You are ignoring the fact that many of these "elite" are so because they are extremely intelligent and hard-working. Many of these people have had multiple successful ventures/businesses/investments. I think you're making the mistake of assuming that all "rich people" are rich because they got lucky (inherited it, won the lotto, had 1 successful business out of sheer luck, etc), and I highly doubt this is the case.

If Warren Buffet's USD is suddenly worth 0, do you think he's going to live out the rest of his life working at Burger King, or do you think he'll just start up some new ventures and be rich again by the end of the year?

Of course you'll have some trust fund brats who are suddenly worth nothing, but those are the same people who would have just blown most of their money anyway. Intelligent investors will easily adjust to the new system.

[Imahara]

Many people have savings just because they've put in a lot of time over the years to accumulate it. I don't mean to say the aren't smart enough, but bitcoin is still relatively unknown, and the sudden price rise and initial distribution is happening NOW.

When introducing a new currency, the initial distribution makes a huge difference in wealth distribution. When the Deutschmark was brought to East Germany, they sure as hell didn't want to change every Ostmark with a Deutschmark 1:1, that would have made the communist elite rich in the new situation as well. They used the currency conversion to deliberately change the wealth distribution, see the rules below:

-Currency holding of up to 4000 Ostmarks per person were converted at a one-for-one ratio,
-Savings in excess of 4000 Ostmarks per person were converted at a two Ostmark to one Deutschemark ratio
-Currency holdings acquired shortly before unification were converted at three Ostmark to one Deutschemark ratio

There is an overhang of savings that will start moving when it becomes obvious bitcoin is going to stay. A pretty bullish idea for those holding bitcoin. The introduction of Bitcoin has the potential to cause a huge shift in the wealth distribution. It might not be fairer, but it will sure be different!

[jubalix]

Your argument relies on the postulate that Bitcoin is going to become a global standard. There isn't anything coercing the world economy into adopting Bitcoin. On the other hand, "those with a big stash of the old currency" already have enough wealth that they could prevent Bitcoin's widespread adoption.

yes there is, you can transfer x $billion to whoever you want with BTC, across borders and jurisdictions, in about 10 minutes, for free, with a 10T market cap this will be done.

No other financial system gives this sort of power and flexibility, to every one/entity. Imagine the amount of banking infrastructure, laws, regulation, and all the associated cost in running it.

There's probably at least 2 trillion tied up in realestate, wages, IT, regulation, that can go from the retail and commercial banking sector alone due to bitcoin, and ok it takes money to run BTC, but that's where PPC or Emunie come in, to meet that issue, cheap to run as well.

[Imahara]

Black shells or white shells, spread them eggs. People thinking they should cash out of BTC to have it save in dollar might be mistaken.

I have been using bitcoin for years. Just last week I made a transfer with LocalBitcoins.com instead of Western Union. Amazing difference, I actually profited 15% on the effective rate and saved an hour waiting time on both sides. The BTC was in the bank account in 5 minutes across the world!

It really dawned on me, Western Union is a dead company walking. Remittances alone could carry the bitcoin success. Paypal next..

[Imahara]

Deserve has got nothing to do with it. It is like you just happened to sit on a pile of white shells, we just happened to be introduced to bitcoins in time and appreciated the potential. Wealthier people buying in later only adds to early entrants profit, having seen a 50x rise already.

Well it is clear that you feel you are more deserving than the elite, but the fallacy is why do you assume they will adopt your limited hangout and not just destroy or co-opt it instead. I have already detailed how they can do this, just read through my posts over the past 3 weeks.

[Lethn]

I would love to see them try to force us to do that, with Bitcoin being open source it will be pretty much impossible, we'll find a way around everything just like we did with filesharing, to this day I easily circumvent my ISP's blockade of piratebay and other torrent sites and I'm not even a hacker.

[BitcoinNews.io]

let the reshuffling begin. it's not like it was fair to start off with!

[wachtwoord]

If Warren Buffet's USD is suddenly worth 0, do you think he's going to live out the rest of his life working at Burger King, or do you think he'll just start up some new ventures and be rich again by the end of the year?

Buffet only has a fraction of his net worth in fiat currency. He won't care.

Rich people have been smart enough not to save in fiat currency for a very long time.

[z3r0]

Buffet only has a fraction of his net worth in fiat currency. He won't care.

Rich people have been smart enough not to save in fiat currency for a very long time.

Yes, they *own* things.

[wachtwoord]

It really dawned on me, Western Union is a dead company walking. Remittances alone could carry the bitcoin success. Paypal next..

I own shares in WU. I think they can leverage Bitcoin when it becomes sufficiently widespread.

[techstorm2]

It's just evolution. More adaptive beings survive to replace obsolete dinosaurs.

Humble geeks with agile minds will replace confident dandies with agile mouths.

As it says in the good book, the geek shall inherit the earth!!

 

[Elwar]

You could take all the wealth in the world and distribute it evenly to everyone in the world.

Within 20 years it would be right back to how it was before.

[wachtwoord]

You could take all the wealth in the world and distribute it evenly to everyone in the world.

Within 20 years it would be right back to how it was before.

True because an even wealth distribution is sub-optimal.