A way to lessen inequality in Bitcoin

[Peter R]

I've said this elsewhere already, but if the transition to cryptocurrency is anything but smooth (and that's a seriously optimistic scenario), then there will be alot of people who end up losing all their saved money, even their pocket change, because no-one will sell them cryptocurrency in exchange for it. That number could be higher than we'd all be comfortable with, so there's got to be some contingency for how bad that kind of situation could be.

Put another way, when currencies in a fractional reserve system collapse, only the quickest will get any money out in time. What fraction of those quickest will get their money into hard currency before the real value becomes zero? Troubling to think how many people could be left with nothing. I will not be happy with that situation.

Well, most people in the world today already have basically nothing. Even in the United States the average person's net worth is less than 5,000 dollars and they live from paycheck to paycheck. When the fractional reserve system collapses, I believe the new economy will give more people a fair chance to accumulate money and eventually achieve a basic level of financial security.

In such a scenario, those too slow to convert dollars to bitcoin would lose their fiat-denominated assets, but many of those people have much greater fiat-denominated debt.  I see a full-blown currency collapse and stampede into bitcoin as a great jubilee and as something beneficial for the average person (provided the transition is reasonably peaceful).  

[1713987016]

1713987016

[Ibian]

If bitcoin needs to stoop to bribery to become mainstream instead of doing so on its own merits then it won't last and I want no part of it. No matter the form of money, once socialism sets in we will be right back where we were. Only without the ability to print money, which will make the system collapse that much faster. There can not be winners without losers, and everyone being equal means nobody is doing that great. Set up your own private soup kitchen if you want but don't try to drag the world along with it.

When ushering in a new system it makes sense to get everyone started with some satoshis to even the playing field a little.

This isn't something so innocent and harmless as facebook or twitter. It's a global economic system that has the potential to revolutionize the world economy. If it can't find solid footing without bribery, which your proposal essentially is, then it is unsound. We don't need it for adoption, or if we do then it's time to pull out.

[Siegfried]

Making such a fund will make bitcoin gain legitimacy as everyone has a stake. Once you have 70BTC every human can have a stake in Bitcoin. At least on paper until the fingerprint reading equipment thing is sorted out. It would be in every Bitcoiners best interest to donate a portion of their holdings to such a fund.

Edit: in fact every Bitcoin-holder would benefit from giving away Bitcoin until it hits a sweet spot of potential increase in BTC price and BTC-percentage given away.

If you mean each person will have 70 btc, you may want to check the math. :-)

I meant 70 BTC is enough to give everyone one satoshi, and then everyone has a stake in making Bitcoin more valuable. If more than 70 btc comes in, then great, more satoshis for everyone. If 7000 btc kome in everyone will have 1000 satoshis. That means that the price has to go to $100k/btc for that to be worth $1, but it wont flood the market because it will take time to implement so that people can actually access their wallets. Price went up 100x in 2013. If 7000btc were given away as a free gift, the price could easily go up to $100k in 2014. And according to Dan Arielys Predictably Irrational, the best way to make someone want something is to give away a free gift.

I totally agree. I do not have a very large number of bitcoins, but I offer to give free bitcoin to everyone I discuss bitcoin with. People who would otherwise laugh at the idea and never consider it seriously instead download a wallet, receive a few dollars worth of bitcoin, see how it works, and come away thinking that it is pretty cool. I also encourage them to tell their friends and invite them to come meet me. If everyone who owns more than 100 BTC (~10,000 people) decided to give away 0.01 BTC (1 BTC total) to 100 people, then there would be 1 million new bitcoin users. I believe that adding 1 million new people to the bitcoin economy would have an upward influence on price of much more than the 1 percent of BTC holdings that people would have given away.

[Carlton Banks]

There is this saying, maybe some of you know it. Goes something like this: Give a man a fish and you feed him for a day. Give a man a fishing rod, and he will trade it for a fish! This is because man is lazy and will always have his hand out as long as there are hand-outs.

It wont solve the worlds problems, but it will at make Bitcoin mainstream.

I kind of think that concept can solve those problems, but I also agree with the thread's basic premise too.

We can't solve this issue sufficiently well in time for when cryptocurrency over-trumps fiat. Not in 2 years, 5 or 10. So something's gotta be done in the short term, however small. But we must change this dependency culture in the future, and I think the crypto-revolution in general will help to encourage that more than perhaps any awareness campaign ever could.

Next problem: who runs the fund? To who can we trust to distribute these hardship donations? I'm thinking along the lines of, no-one! Maybe these need to be super-localised, someone needs to step up in every locality that covers x thousand people. Kind of removes the temptation toward sticky fingered types.

[Carlton Banks]

I've said this elsewhere already, but if the transition to cryptocurrency is anything but smooth (and that's a seriously optimistic scenario), then there will be alot of people who end up losing all their saved money, even their pocket change, because no-one will sell them cryptocurrency in exchange for it. That number could be higher than we'd all be comfortable with, so there's got to be some contingency for how bad that kind of situation could be.

Put another way, when currencies in a fractional reserve system collapse, only the quickest will get any money out in time. What fraction of those quickest will get their money into hard currency before the real value becomes zero? Troubling to think how many people could be left with nothing. I will not be happy with that situation.

Well, most people in the world today already have basically nothing. Even in the United States the average person's net worth is less than 5,000 dollars and they live from paycheck to paycheck. When the fractional reserve system collapses, I believe the new economy will give more people a fair chance to accumulate money and eventually achieve a basic level of financial security.

I agree in principle, but what I'm worried about is the weeks and months immediately following some form of crash. That's a real flashpoint, where a future course can get entrenched for quite a while. What direction is taken at that point could mean the difference between a few years of economic recovery and a few decades. The fact that everyone will be better off in 20 years once the balance has evened out isn't going to make those 20 years much fun. Think zombie apocalypse movies! (that's why that genre started getting popular again...!)

[Ibian]

Zombie welfare rioters. That's probably also why homeland security bought about 300 bullets/american. Fun times ahead.

A crash is rarely smooth. There WILL be problems.

[DeathAndTaxes]

Put another way, when currencies in a fractional reserve system collapse, only the quickest will get any money out in time. What fraction of those quickest will get their money into hard currency before the real value becomes zero? Troubling to think how many people could be left with nothing. I will not be happy with that situation.

I think you might be equating wealth with money.  Money makes up a small portion of the average persons wealth.  Property, stocks, real estate, etc would still have value in a currency collapse. 

[jinni]

There is this saying, maybe some of you know it. Goes something like this: Give a man a fish and you feed him for a day. Give a man a fishing rod, and he will trade it for a fish! This is because man is lazy and will always have his hand out as long as there are hand-outs.

It wont solve the worlds problems, but it will at make Bitcoin mainstream.

Who runs the fund? To who can we trust to distribute these hardship donations? I'm thinking along the lines of, no-one! Maybe these need to be super-localised, someone needs to step up in every locality that covers x thousand people. Kind of removes the temptation toward sticky fingered types.

The fund could be managed just by code. Or maybe the Bitcoin foundation could be custodian. Then you can make this hardware fingerprint-scanner that only works with live fingers, scan and get access to your wallet. The cost of the scanner would be higher than the value of the satoshis but one scanner can be used by many people. So one guy with a computer and a fingerprint scanner could make a business out of scanning peoples fingerprints and giving them access to their wallets for a fee. I think the market will solve the problem.

[Carlton Banks]

Put another way, when currencies in a fractional reserve system collapse, only the quickest will get any money out in time. What fraction of those quickest will get their money into hard currency before the real value becomes zero? Troubling to think how many people could be left with nothing. I will not be happy with that situation.

I think you might be equating wealth with money.  Money makes up a small portion of the average persons wealth.  Property, stocks, real estate, etc would still have value in a currency collapse. 

No, not leaving that out of the scenario. I think you might be assuming that the average person has hard assets. The majority don't, all the more so after the consequences of the last 5 years. They're who I'm worried about.

[Ibian]

There is this saying, maybe some of you know it. Goes something like this: Give a man a fish and you feed him for a day. Give a man a fishing rod, and he will trade it for a fish! This is because man is lazy and will always have his hand out as long as there are hand-outs.

It wont solve the worlds problems, but it will at make Bitcoin mainstream.

Who runs the fund? To who can we trust to distribute these hardship donations? I'm thinking along the lines of, no-one! Maybe these need to be super-localised, someone needs to step up in every locality that covers x thousand people. Kind of removes the temptation toward sticky fingered types.

The fund could be managed just by code. Or maybe the Bitcoin foundation could be custodian. Then you can make this hardware fingerprint-scanner that only works with live fingers, scan and get access to your wallet. The cost of the scanner would be higher than the value of the satoshis but one scanner can be used by many people. So one guy with a computer and a fingerprint scanner could make a business out of scanning peoples fingerprints and giving them access to their wallets for a fee. I think the market will solve the problem.

Hold up. Bitcoin is, among other things, about personal ownership. You are setting up a bank for satoshis that people have to pay a fee to access. Sounds like a great business model.

[jinni]

There is this saying, maybe some of you know it. Goes something like this: Give a man a fish and you feed him for a day. Give a man a fishing rod, and he will trade it for a fish! This is because man is lazy and will always have his hand out as long as there are hand-outs.

It wont solve the worlds problems, but it will at make Bitcoin mainstream.

Who runs the fund? To who can we trust to distribute these hardship donations? I'm thinking along the lines of, no-one! Maybe these need to be super-localised, someone needs to step up in every locality that covers x thousand people. Kind of removes the temptation toward sticky fingered types.

The fund could be managed just by code. Or maybe the Bitcoin foundation could be custodian. Then you can make this hardware fingerprint-scanner that only works with live fingers, scan and get access to your wallet. The cost of the scanner would be higher than the value of the satoshis but one scanner can be used by many people. So one guy with a computer and a fingerprint scanner could make a business out of scanning peoples fingerprints and giving them access to their wallets for a fee. I think the market will solve the problem.

Hold up. Bitcoin is, among other things, about personal ownership. You are setting up a bank for satoshis that people have to pay a fee to access. Sounds like a great business model.

They pay the fee once and then they have access to their funds forever. Then they are their own banks. You just scn their fingerprint so they can have access to a blockchain.info account or a paper wallet with the funds - that is a fingerprint scanning service, not a bank.

[Phrenico]

This is not an endorsement of the idea, but you'll have to come up with a better solution than fingerprint scanning. There's no feasible way of making a deterministic hash of someone's fingerprint. Real fingerprint detectors (are fallible and) separate signal from noise; hash functions can't.

Genetic material is more doable because it's discrete, but there's no way to prevent someone from collecting samples from people they encounter and stealing their Satoshis.

[mistress_magpie]

http://en.m.wikipedia.org/wiki/Basic_income

basic income is a well studied economic proposal - if government wishes to start this they could certainly pay people in btc.

[Siegfried]

Before giving away bitcoin to every person in the world, I think it would be better to do this on a smaller scale with targeted objectives. Take for example a small country like Cyprus, which is already becoming a bitcoin leader. If everyone in Cyprus were given some bitcoin, we would see the process of near total adoption of bitcoin in a country quickly realized. Imagine the media coverage that would generate. Or do this to a small town in the United States. Offer free bitcoin to everyone in the town if every business agrees to accept bitcoin payments. The Native American bitcoin activist who is trying to get his tribe to adopt bitcoin is another great example - targeted donations to a group like that would have greater benefits than universal micro-donations to everyone in the world.

[DeathAndTaxes]

No, not leaving that out of the scenario. I think you might be assuming that the average person has hard assets. The majority don't, all the more so after the consequences of the last 5 years. They're who I'm worried about.

It they don't have assets then they likely don't have any significant money either.  People don't just sit around with mountains of cash and no assets.   Cash continually loses value.  Other than death and taxes it is one of the certainties of life.  If fact quite a few people have a negative net worth which means in a currency failure their negative networth would rapidly approach zero (a net improvement).

[jinni]

http://en.m.wikipedia.org/wiki/Basic_income

basic income is a well studied economic proposal - if government wishes to start this they could certainly pay people in btc.

Certainly they can, but as long as they keep collecting the money through taxes it is an immoral use of force.

[Carlton Banks]

No, not leaving that out of the scenario. I think you might be assuming that the average person has hard assets. The majority don't, all the more so after the consequences of the last 5 years. They're who I'm worried about.

It they don't have assets then they likely don't have any significant money either.  People don't just sit around with mountains of cash and no assets.   Cash continually loses value.  Other than death and taxes it is one of the certainties of life.  If fact quite a few people have a negative net worth which means in a currency failure their negative networth would rapidly approach zero (a net improvement).

I agree, and these people make up the majority of western populations. It's worse than what you've outlined, some of these people have no assets and no income (and no prospect of getting some any time soon). Telling this category of people that their debts are absolved because of the biggest economic depression of all time might be a pretty short-lived celebration.


My preference would be that a measure to redistribute hardship funds to people isn't needed. It's only really a big problem under circumstances where large amounts of people with no assets, zero savings and no income don't take the chance to hedge their bets with cryptocurrency. From the way that people everywhere, in all sorts of contexts, are beginning to talk about it now, I wonder whether most people won't at least know someone to turn to on a personal level. It sounds cold, but if ~5% of people don't take some stake, that would be just about tolerable. Half of those people could be doing out of conservatism, and if they're vulnerable, they might get the help they need from someone they know in the 95%.

But if 35% of people are too stubborn to at least hold a little cryptocurrency, we could have a real nightmare on our doorsteps. For decades. Then it turns into a case of who's quick enough to buy a stake in the limited seasteads... before full-on zombie apocalypse ensues! 

Where's the flashpoint for chaos though? 90/10? 85/15? I not sure if I like the sound of 80/20 at all...

[Carlton Banks]

http://en.m.wikipedia.org/wiki/Basic_income

basic income is a well studied economic proposal - if government wishes to start this they could certainly pay people in btc.

Certainly they can, but as long as they keep collecting the money through taxes it is an immoral use of force.

Agreed.

100 years ago, you could move to America if you didn't like socialist style governments. You could vote with your feet. Since the US started the income tax and the Federal Reserve, that declined, slowly, but declined. They've still got vestiges of a republican system in the US, but it's slowly turning into a centralised, corporatist caricature of the type of country that the US constitution was meant to safeguard.

The people of the world need a free choice again. If you like communist/socialist style government, there should be some opportunity to live like that. Centralised or decentralised (the decentralised version of communism has not been practiced in anywhere but tiny little tribes that live outside the reach of a central government AFAIK). And if you want libertarian/liberal capitalism with a republican constitution, there should be an opportunity to live like that too.

The 20th century was spent molding the world's people into the belief that whatever system you thought your country was living under, that was definitely what you were getting. All the nice people at the newspapers, and those noble politicians, and the glamorous celebrities, they all told us so! But it was all a long con; US capitalism was a long con, Soviet communism was a long con, European socialism was a long con. All of those systems would have been fine if they worked as advertised, but "reality" always ended up contorting the system into corporatism with a little flavour of what the people thought was supposed to be the ruling doctrine. There was always some event that came along where the politicians would basically say "this communist/capitalist/socialist thing is all fine, but this is also real life, and we've been forced to do something that goes against it! Sorry!"

[Hawker]

http://en.m.wikipedia.org/wiki/Basic_income

basic income is a well studied economic proposal - if government wishes to start this they could certainly pay people in btc.

Certainly they can, but as long as they keep collecting the money through taxes it is an immoral use of force.

Saying that collecting taxes is immoral doesn't really advance your cause much.  Most people think its immoral to allow the poor to starve and thus collecting taxes is the lesser of two evils.  What you need to do is either make a moral case for allowing the poor to starve or stop complaining about taxation being immoral.

[cr1776]

http://en.m.wikipedia.org/wiki/Basic_income

basic income is a well studied economic proposal - if government wishes to start this they could certainly pay people in btc.

Certainly they can, but as long as they keep collecting the money through taxes it is an immoral use of force.

Saying that collecting taxes is immoral doesn't really advance your cause much.  Most people think its immoral to allow the poor to starve and thus collecting taxes is the lesser of two evils.  What you need to do is either make a moral case for allowing the poor to starve or stop complaining about taxation being immoral.

I didn't see jinni advocating "allowing the poor to starve".  I think he believes, as do many, that charities are much more capable than government in providing for the poor since they are much more local, efficient, and accountable.

Forced servitude to provide for someone else is immoral no matter what the person's need is.  Voluntarily saying you will help is a completely different matter.  Most people are more than willing to help others and around here do so.  It isn't charity at the point of a gun, and it isn't charity or moral if you are giving away the products of someone else's life.  In short, someone's "need" doesn't give them a right to force you to work to provide something for them.