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Author Topic: 790 people own half the bitcoins  (Read 5162 times)
billyjoeallen
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January 29, 2014, 09:22:15 AM
 #21

the bitcoin wealth distribution will decrease as the value of each bitcoin goes up. This is because money has marginal utility like anything else does. It's why billionaires become philanthropists. When you have far more of something than you need, each unit of that thing becomes less valuable than the previous unit.  If you have everything in the world that you want except a good reputation, you will likely trade your money for a good reputation, even if you think it's being more productively used where it's at. It's called sanitizing your wealth and it's the smart move to protect yourself from envious people.

World'st richest 85 people hold as much wealth as the poorest 3.5 billion - so your theory doesn't exactly apply to the real world. Also its much easier to grow your stash when you have shitloads of capital and the power/connections that come with it...

Ah, here we get to the meat of the matter. It DOES apply to the real world because it shows how income distribution is WORSE when ostensibly egalitarian governments interfere with the free market. Only with government tilting the playing field can concentrations of wealth reach those crazy levels. Bullshit tactics like graduated income taxes do very little when opposed to government monopoly power. Examples are patents, copyrights, and trademarks. Licenses and regulations create barriers to entry in most industries also.
How much would Bill gates have without anti "piracy" enforcement? What would Coca Cola be worth without it's trademarks?  What would books, movies and music make without copyrights? Copying isn't stealing. Making fake crimes makes some wealthy at the expense of many.


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January 29, 2014, 09:23:26 AM
 #22

Thanks for your analysis.  Smiley
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January 29, 2014, 09:34:43 AM
 #23

The number of bitcoin millionaires, previously estimated 930, decreased to 790 (-15%). Their combined wealth is 5.9M bitcoins, which is 50% of all bitcoins.

One thing isn't clear here, did the number decrease because some sold or because bitcoins declined in value? It might make more sense to just refer to the number of hodlers at each coin level rather than dollar level when tracking changes over time.
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January 29, 2014, 09:37:36 AM
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the bitcoin wealth distribution will decrease as the value of each bitcoin goes up. This is because money has marginal utility like anything else does. It's why billionaires become philanthropists. When you have far more of something than you need, each unit of that thing becomes less valuable than the previous unit.  If you have everything in the world that you want except a good reputation, you will likely trade your money for a good reputation, even if you think it's being more productively used where it's at. It's called sanitizing your wealth and it's the smart move to protect yourself from envious people.

World'st richest 85 people hold as much wealth as the poorest 3.5 billion - so your theory doesn't exactly apply to the real world. Also its much easier to grow your stash when you have shitloads of capital and the power/connections that come with it...

Ah, here we get to the meat of the matter. It DOES apply to the real world because it shows how income distribution is WORSE when ostensibly egalitarian governments interfere with the free market. Only with government tilting the playing field can concentrations of wealth reach those crazy levels. Bullshit tactics like graduated income taxes do very little when opposed to government monopoly power. Examples are patents, copyrights, and trademarks. Licenses and regulations create barriers to entry in most industries also.
How much would Bill gates have without anti "piracy" enforcement? What would Coca Cola be worth without it's trademarks?  What would books, movies and music make without copyrights? Copying isn't stealing. Making fake crimes makes some wealthy at the expense of many.



Im not disagreeing that it is government force (power/connections I was referring to) that is helping the rich get richer, but even widespread adoption of Bitcoin is not going to necessarily kill the government and its brand of rule by decree that seems to extend to every corner of the markets. Now if you're talking about a scenario where we have genuine 'free markets', then I can entertain your idea but even that goes against human nature and the greed that is instilled in each one of us, whether 'enlightened' or not.

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January 29, 2014, 09:44:42 AM
 #25

Ah, here we get to the meat of the matter. It DOES apply to the real world because it shows how income distribution is WORSE when ostensibly egalitarian governments interfere with the free market. Only with government tilting the playing field can concentrations of wealth reach those crazy levels. Bullshit tactics like graduated income taxes do very little when opposed to government monopoly power. Examples are patents, copyrights, and trademarks. Licenses and regulations create barriers to entry in most industries also.
How much would Bill gates have without anti "piracy" enforcement? What would Coca Cola be worth without it's trademarks?  What would books, movies and music make without copyrights? Copying isn't stealing. Making fake crimes makes some wealthy at the expense of many.

I appreciate your feedback.

Absent coercion there is nothing wrong, nothing immoral or nothing unnatural in ultimate concentrations of wealth.

When there is no coercion, industrious people have the license to strive for more riches. Currently such license does not exist. One banker entity controls 80% of the largest companies and helds sway over most of the governments that collect 50% of the yearly produce, is in direct control of the military that equals the rest of the world combined, has perverted the laws in most countries to make decent and productive living impossible, and the media so that a tiny % of people have any idea of the woefulness of the situation.

In the world without coercion, the changes in bitcoin ownership happen slowly. The marketplace is very competitive so that you cannot make monopoly profits. Even if you had relatively many bitcoins (Satoshi), they don't disturb the market any more than the huge holds of gold disturb the gold market.
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January 29, 2014, 09:55:17 AM
 #26

The number of bitcoin millionaires, previously estimated 930, decreased to 790 (-15%). Their combined wealth is 5.9M bitcoins, which is 50% of all bitcoins.

One thing isn't clear here, did the number decrease because some sold or because bitcoins declined in value? It might make more sense to just refer to the number of hodlers at each coin level rather than dollar level when tracking changes over time.

I mostly track the changes in coin levels, as you suggested.

The reason millionaires (defined as people owning bitcoins equivalent to purchasing power of $1 million) have a special place in my heart is that I believe they have the highest potential to become full-time bitcoin evangelists. So if the number of millionaires grows, the impact to the rest of the world will soon grow also.

Instead of seeing these 790 people with total bitcoin wealth of 5.9 million (USD 4.7 billion, $6M per pop) in a hostile way, we should embrace them, because they are every bit as crucial for bitcoin's success as the midsize holders and small holders, if not more. You can think of Bitcoin economy without millionaires - I would still be working and not posting here for example Wink



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January 29, 2014, 06:17:49 PM
 #27

This analysis is fascinating; if not slightly scary. It kinda reminds me of the issues throughout history where a very select few hold most of the money. History has shown us what happens in many of these scenarios; but in this new paradigm, can we rebut history?

Admittedly, I understand that balances can still be achieved. Case in point: China owns a near monopoly in the rare earths market (used in much of the electronics market), but other countries have near monopolies on different segments too. Usually, the "damage" comes when powers work in concert. Nonetheless, there isn't inherently necessary. Unfortunately, human nature fails miserably at times...
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January 29, 2014, 09:17:06 PM
 #28

What I find amazing is you need more than a 1000Bitcoins to be a millionnaire, it seems like a lot. When the dollar will crash (starting at end of 2014?2015?), having bitcoins will be pretty sweet and there will sadly be a lot more of $millionnaires

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January 29, 2014, 10:12:23 PM
 #29


Probably ArtForz, that dirty bugger.

Or not, don't generated unspent blocks all have their own address and are untraceable as long as they aren't spent?

Heh, I was joking.   However, you're right, unless he consolidated them all into various address for easier offline storage, they would be strewn across a tonne of 50BTC wallets.  Has anybody heard from ArtForz recently?  Any speculation on how many coins he still holds?
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January 29, 2014, 11:11:20 PM
 #30

What I find amazing is you need more than a 1000Bitcoins to be a millionnaire, it seems like a lot. When the dollar will crash (starting at end of 2014?2015?), having bitcoins will be pretty sweet and there will sadly be a lot more of $millionnaires

But who cares about $ millionaires after hyperinflation?
Not the fiat value of bitcoin counts, the only important thing is purchasing power and that's not coupled with fiat.


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January 29, 2014, 11:18:00 PM
 #31

Is our friend here, indeed Richard Branson - that Richard Branson of Virgin Atlantic?

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January 30, 2014, 08:25:16 AM
 #32

Is our friend here, indeed Richard Branson - that Richard Branson of Virgin Atlantic?

Unless he lists the email as @virgin.com purely for jest, he probably is Smiley

What I find amazing is you need more than a 1000Bitcoins to be a millionnaire, it seems like a lot. When the dollar will crash (starting at end of 2014?2015?), having bitcoins will be pretty sweet and there will sadly be a lot more of $millionnaires

But who cares about $ millionaires after hyperinflation?
Not the fiat value of bitcoin counts, the only important thing is purchasing power and that's not coupled with fiat.

Sir,

In the short term, what counts is the number of your bitcoins, because there is/will only be a certain number of them, regardless how useful/valuable they turn out a few years down the road. By grabbing as many as possible and holding through this "land grab" phase, you withhold the supply and also contribute towards their value increasing, which causes the existing bitcoin millionaires' position to increase in value, and gives them more leverage to develop the Bitcoin economy.

In the long term, what counts is the purchasing power of one bitcoin, because it can be posited that it is either quite low or really high, with no "most probable case" in between. In the "really high" case anyone who has even 1 bitcoin is set for life - there will never be more than 1 million people with more than 1 bitcoin at any one time, it is a corollary of the parameters of the distribution that this thread is all about.

Based on the above, what a rational person who wants Bitcoin to succeed should do, is to work as much as possible and buy as much bitcoins as possible until he cannot reasonably increase his position any more. Then quit his job and become full-time bitcoiner, to leverage both his knowledge of bitcoin, and his time, and his wealth, to make a great impact. This will be a symbiotic act, helping the next generation of bitcoiners and by this doing, protecting the continued appreciation of his own investment, even though the number of coins is in decline.

The dollar value of a bitcoin (or the value of a dollar) is not used except to communicate the values in "2014 units", to make the analysis a little more understandable for people with no mathematical analytic mindset.
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January 30, 2014, 10:47:07 AM
 #33

Is our friend here, indeed Richard Branson - that Richard Branson of Virgin Atlantic?

Unless he lists the email as @virgin.com purely for jest, he probably is Smiley

What I find amazing is you need more than a 1000Bitcoins to be a millionnaire, it seems like a lot. When the dollar will crash (starting at end of 2014?2015?), having bitcoins will be pretty sweet and there will sadly be a lot more of $millionnaires

But who cares about $ millionaires after hyperinflation?
Not the fiat value of bitcoin counts, the only important thing is purchasing power and that's not coupled with fiat.

Sir,

In the short term, what counts is the number of your bitcoins, because there is/will only be a certain number of them, regardless how useful/valuable they turn out a few years down the road. By grabbing as many as possible and holding through this "land grab" phase, you withhold the supply and also contribute towards their value increasing, which causes the existing bitcoin millionaires' position to increase in value, and gives them more leverage to develop the Bitcoin economy.

In the long term, what counts is the purchasing power of one bitcoin, because it can be posited that it is either quite low or really high, with no "most probable case" in between. In the "really high" case anyone who has even 1 bitcoin is set for life - there will never be more than 1 million people with more than 1 bitcoin at any one time, it is a corollary of the parameters of the distribution that this thread is all about.

Based on the above, what a rational person who wants Bitcoin to succeed should do, is to work as much as possible and buy as much bitcoins as possible until he cannot reasonably increase his position any more. Then quit his job and become full-time bitcoiner, to leverage both his knowledge of bitcoin, and his time, and his wealth, to make a great impact. This will be a symbiotic act, helping the next generation of bitcoiners and by this doing, protecting the continued appreciation of his own investment, even though the number of coins is in decline.

The dollar value of a bitcoin (or the value of a dollar) is not used except to communicate the values in "2014 units", to make the analysis a little more understandable for people with no mathematical analytic mindset.

If by continuing to work for fiat income I can increase my bitcoin wealth by at least 1 percent, I will probably continue to work. For example, if I hold 100 bitcoins and I can afford to buy 1 bitcoin per month at 800 dollars per bitcoin, I will continue to work. But if the price reaches 4000 dollars per bitcoin, my 800 dollar bitcoin investment would only increase my bitcoin wealth 0.2 percent, so I would not continue working for that wage. But if I only had 1 bitcoin now, 800 dollars per month would increase my bitcoin wealth 20 percent, so I would keep that job.

I would like to hear your thoughts on this.
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January 30, 2014, 11:05:21 AM
 #34

#people = wallets?
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January 30, 2014, 01:10:50 PM
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#people = wallets?

No. Read the OP and the link there.
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January 30, 2014, 03:01:44 PM
 #36

Is our friend here, indeed Richard Branson - that Richard Branson of Virgin Atlantic?

Unless he lists the email as @virgin.com purely for jest, he probably is Smiley

What I find amazing is you need more than a 1000Bitcoins to be a millionnaire, it seems like a lot. When the dollar will crash (starting at end of 2014?2015?), having bitcoins will be pretty sweet and there will sadly be a lot more of $millionnaires

But who cares about $ millionaires after hyperinflation?
Not the fiat value of bitcoin counts, the only important thing is purchasing power and that's not coupled with fiat.

Sir,

In the short term, what counts is the number of your bitcoins, because there is/will only be a certain number of them, regardless how useful/valuable they turn out a few years down the road. By grabbing as many as possible and holding through this "land grab" phase, you withhold the supply and also contribute towards their value increasing, which causes the existing bitcoin millionaires' position to increase in value, and gives them more leverage to develop the Bitcoin economy.

In the long term, what counts is the purchasing power of one bitcoin, because it can be posited that it is either quite low or really high, with no "most probable case" in between. In the "really high" case anyone who has even 1 bitcoin is set for life - there will never be more than 1 million people with more than 1 bitcoin at any one time, it is a corollary of the parameters of the distribution that this thread is all about.

Based on the above, what a rational person who wants Bitcoin to succeed should do, is to work as much as possible and buy as much bitcoins as possible until he cannot reasonably increase his position any more. Then quit his job and become full-time bitcoiner, to leverage both his knowledge of bitcoin, and his time, and his wealth, to make a great impact. This will be a symbiotic act, helping the next generation of bitcoiners and by this doing, protecting the continued appreciation of his own investment, even though the number of coins is in decline.

The dollar value of a bitcoin (or the value of a dollar) is not used except to communicate the values in "2014 units", to make the analysis a little more understandable for people with no mathematical analytic mindset.
 

Beautiful!
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January 31, 2014, 12:47:10 PM
 #37

the bitcoin wealth distribution will decrease as the value of each bitcoin goes up. This is because money has marginal utility like anything else does. It's why billionaires become philanthropists. When you have far more of something than you need, each unit of that thing becomes less valuable than the previous unit.  If you have everything in the world that you want except a good reputation, you will likely trade your money for a good reputation, even if you think it's being more productively used where it's at. It's called sanitizing your wealth and it's the smart move to protect yourself from envious people.

If that's true, I am more than willing to accept even the tiniest donation of btc on 1Kg9cnA3yyP47s9pThy64M8uwyCqyCnZzT

Show some good reputation Smiley

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January 31, 2014, 02:08:44 PM
 #38

[...] Then quit his job and become full-time bitcoiner, to leverage both his knowledge of bitcoin, and his time, and his wealth, to make a great impact. This will be a symbiotic act, helping the next generation of bitcoiners and by this doing, protecting the continued appreciation of his own investment, even though the number of coins is in decline.

I don't find it a good advice for someone to quit his job UNLESS he can do more things than working for sombebody else.

I've seen lots of cases when people quit their job to work for themselves and started getting up at 1pm, sipping coffee and reading press until 2pm and then working a bit (just a bit, 'cause hey, if you're your own boss, who can say something to you?).

They failed miserably. I find working for somebody else more relaxing, 9-18. When I'm working for myself, each day is a Syberian marathon. And my biggest problem is that when I'm working for myself, nobody's there to help. I'm a whole football team.

So, noobs, don't quit your job unless you can and want to do more.

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January 31, 2014, 03:55:09 PM
 #39

there will never be more than 1 million people with more than 1 bitcoin at any one time
Interesting topic. How was this derived? According to the table, about 329k people hold BTC1+
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January 31, 2014, 05:09:07 PM
 #40

You bitcoin millionaires should start using your bitcoins for founding bitcoin startups immediately, and also massive amount of ads everywhere.
With all that money you may improve many things in bitcoin itself and related, use stuff like BitHub to encourage more development, or found academic researches.

Don't hold, distribute!

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