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Author Topic: At what point does Bitcoin become protestable?  (Read 5948 times)
Red
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October 16, 2011, 07:12:04 AM
 #1

As best I can tell 35.5% of all bitcoins have already been minted. These 7,473,950 coins are all property of existing bitcoin users. There seem to be about 41,280 registered members of this site. I'll be generous and say there are ten times as many bitcoin users as there are members. That means about 410,280 bitcoin owners with on average 18 BTC each. Clearly BTC ownership is more concentrated than this, but lets be egalitarian for the moment.

If we pretended all bitcoin owners were all Americans that is about 0.13% of the population. It's not of course. Bitcoin is intended to be a world currency. So 0.0068% of the world population own 100% of all current and at least 35.5% of all possible bitcoins.

The view on this forum is that the world will come to their senses, throw out fiat currencies and move to something rational like Bitcoin. This of course means 6,000,000,000 people basically begging to use a resource owned by a relative handful of people. Say we just minted up the remaining 13,526,050 BTC and scattered them to late adopters purely out of the kindness in our hearts. That means about 0.00225 BTC for each of them to use in rebuilding their economy. Sure 18 BTC on average doesn't make us feel very rich. But it is 8,000 times what everyone else would have if we stopped competitive minting today.

But we won't stop competing of course. Sometime around Pearl Harbor Day of next year Bitcoin will hit the 50% distributed mark.

----
By that day, how many active Bitcoin users and daily goods trades do there need to be to make a sustainable Bitcoin economy viable?
----

Because to potential new adopters, after that point Bitcoin is going to look like a new a 21,000,000 coin currency with a 10,500,000 coin pre-generation that went to the creator and his "friends". Certainly people will stop caring about Bitcoin long before they show up on our doorsteps with signs saying,

"We are the 99.9932%!"
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Matthew N. Wright
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October 16, 2011, 07:36:35 AM
 #2

This post is full of so much win.

JA37
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October 16, 2011, 09:08:39 AM
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This is so beautiful it almost brings a tear to my eye. Well done.

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October 16, 2011, 09:26:45 AM
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 Grin 10/10

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Red
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October 16, 2011, 04:00:21 PM
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Thanks for the kind words. I didn't really mean to be a total kill joy.

----
By that day, how many active Bitcoin users and daily goods trades do there need to be to make a sustainable Bitcoin economy viable?
----

I really think the 14 month deadline is pretty set in stone though.

Does anyone see a path to sustainability? I think if the bitcoin community were to throw a couple million coins at the Wall Street protesters. And they were to use them to trade among themselves rather than immediately cashing them out for pizza. Maybe there would be a plausible path.

But, I really think that scenario is a fantasy. The protesters seem to be more "on strike" then productively producing goods they could be traded among themselves.
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October 16, 2011, 05:18:31 PM
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Because to potential new adopters, after that point Bitcoin is going to look like a new a 21,000,000 coin currency with a 10,500,000 coin pre-generation that went to the creator and his "friends".

A very thought provoking post. I feel that you are missing something crucial, but I will have to think on it a while.

In the mean time, I wanted to respond to this in particular. We are not Satoshi's "friends", we are the individuals that built all of the infrastructure surrounding Bitcoin, and believed in it before anyone else. If it does become widely adopted, should all the work done up until this point be dismissed as useless? Were it not for this work, would it ever become adopted in the first place?

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October 16, 2011, 05:23:28 PM
 #7

I'm convinced that come block 210,000, the discussion as to whether the 21 million is a good idea will pop up, and whether we should go with what some have called "inflatacoin".

I'm not saying I think that's what will get adopted... but the more people think about this disparity, and the more people think about miners disappearing because transaction fees aren't quite working the way it was hoped, the more heated the discussion surely will be.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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October 16, 2011, 05:34:40 PM
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Because to potential new adopters, after that point Bitcoin is going to look like a new a 21,000,000 coin currency with a 10,500,000 coin pre-generation that went to the creator and his "friends".

A very thought provoking post. I feel that you are missing something crucial, but I will have to think on it a while.

In the mean time, I wanted to respond to this in particular. We are not Satoshi's "friends", we are the individuals that built all of the infrastructure surrounding Bitcoin, and believed in it before anyone else. If it does become widely adopted, should all the work done up until this point be dismissed as useless? Were it not for this work, would it ever become adopted in the first place?



Anyone who have built infrastructure or services around bitcoin would profit from bitcoin2. Switching from one to the other is a simple move and they would profit. It's the early miners and hoarders that would be hurt.
I've had similar thoughts myself but couldn't have put it quite as elegant as Red.

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October 16, 2011, 05:38:40 PM
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Anyone who have built infrastructure or services around bitcoin would profit from bitcoin2. Switching from one to the other is a simple move and they would profit. It's the early miners and hoarders that would be hurt.
I've had similar thoughts myself but couldn't have put it quite as elegant as Red.

Without the early miners and "hoarders", why would there be any infrastructure created in the first place?

You completely dismiss the fact that if it were not for them, you would not be here, discussing how evil those early miners and hoarders were.
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October 16, 2011, 06:20:43 PM
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Without the early miners and "hoarders", why would there be any infrastructure created in the first place?

You completely dismiss the fact that if it were not for them, you would not be here, discussing how evil those early miners and hoarders were.

True. They do however not contribute much any more. They are the 1%. They're not rich because they contribute something now. Now, those who put that capital to work and try to better the infrastructure around BTC do deserve whatever riches comes to them. Those who were just lucky enough to find out about bitcoin a year ago and mined a crapload doesn't.
Hence, only those who don't contribute would object to a reboot of bitcoin.

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October 16, 2011, 06:31:59 PM
 #11

They do however not contribute much any more.

What is the basis for this assertion?

They are the 1%. They're not rich because they contribute something now.

To compare those who mined or bought Bitcoin early with those who use the political system to extract wealth from those who do not is ridiculous.

Now, those who put that capital to work and try to better the infrastructure around BTC do deserve whatever riches comes to them. Those who were just lucky enough to find out about bitcoin a year ago and mined a crapload doesn't.

You continue to baselessly assume that the two groups are mutually exclusive. Wouldn't it be in the self interest for who "mined a crapload" to spend part of that "crapload" building infrastructure? Do you assume that they are stupid as well as selfish and greedy, and that they cling to every last satoshi even if it means that Bitcoin never becomes widely adopted?

Hence, only those who don't contribute would object to a reboot of bitcoin.

If you want a reboot of Bitcoin, start your own fucking block chain. By advocating a reboot, you're merely exposing your jealousy at not being an early enough adopter. After the first reboot, let say Bitcoin reaches a similar stage as it is at now, with 1% of the world population using it. Oh no, those dreadful early adopters are back! Reboot Bitcoin again!
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October 16, 2011, 06:58:47 PM
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What is the basis for this assertion?

To compare those who mined or bought Bitcoin early with those who use the political system to extract wealth from those who do not is ridiculous.

You continue to baselessly assume that the two groups are mutually exclusive. Wouldn't it be in the self interest for who "mined a crapload" to spend part of that "crapload" building infrastructure? Do you assume that they are stupid as well as selfish and greedy, and that they cling to every last satoshi even if it means that Bitcoin never becomes widely adopted?

If you want a reboot of Bitcoin, start your own fucking block chain. By advocating a reboot, you're merely exposing your jealousy at not being an early enough adopter. After the first reboot, let say Bitcoin reaches a similar stage as it is at now, with 1% of the world population using it. Oh no, those dreadful early adopters are back! Reboot Bitcoin again!

1) A hoarder hoards. That's the definition. If you just stockpile resources you're not contributing.

2) While the history/methods are different the end result is the same. Major concentration of wealth in the hands of a select few.

3) I assume nothing. I'm certain they're not mutually exclusive.

4) Plenty of people have started new blockchains. No need for another useless chain. It's not jealousy, it's pointing to Red's assertion above. Perhaps regular reboots are the way to go until you have mass adoption of bitcoin? Perhaps not. But looking at Red's original text it's quite clear that there's a problem in the current setup. N'est-ce pas`

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October 16, 2011, 08:09:36 PM
 #13

I just reread Satoshi's paper. I still feel ignorant about Bitcoin's inner-workings. Is there something else that comes with owning a Bitcoin? I am almost positive it's only treated as currency by the network. I don't see how somebody having more credits than the other could pose a technical problem. Is there something I am not seeing?

"Dare to liberate your mind, from all things, old and new."
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October 16, 2011, 08:54:18 PM
 #14

They do however not contribute much any more.

What is the basis for this assertion?

They are the 1%. They're not rich because they contribute something now.

To compare those who mined or bought Bitcoin early with those who use the political system to extract wealth from those who do not is ridiculous.

Now, those who put that capital to work and try to better the infrastructure around BTC do deserve whatever riches comes to them. Those who were just lucky enough to find out about bitcoin a year ago and mined a crapload doesn't.

You continue to baselessly assume that the two groups are mutually exclusive. Wouldn't it be in the self interest for who "mined a crapload" to spend part of that "crapload" building infrastructure? Do you assume that they are stupid as well as selfish and greedy, and that they cling to every last satoshi even if it means that Bitcoin never becomes widely adopted?

Hence, only those who don't contribute would object to a reboot of bitcoin.

If you want a reboot of Bitcoin, start your own fucking block chain. By advocating a reboot, you're merely exposing your jealousy at not being an early enough adopter. After the first reboot, let say Bitcoin reaches a similar stage as it is at now, with 1% of the world population using it. Oh no, those dreadful early adopters are back! Reboot Bitcoin again!


Hey, watch this, see the awful hypocrisy:

If you want a reboot of Bitcointhe dollar, start your own fucking block chaincurrency. By advocating a reboot, you're merely exposing your jealousy at not being an early enough adopterborn earlier and into a rich family. After the first reboot, let say Bitcoin reaches a similar stage as it is at now, with 1% of the world populationSatoshi, Gavin, Magical Tux, and BitterTea using it. Oh no, those dreadful early adopters are back! Reboot Bitcoin again!
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October 16, 2011, 09:18:48 PM
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Hey, watch this, see the awful hypocrisy:

If you want a reboot of Bitcointhe dollar, start your own fucking block chaincurrency. By advocating a reboot, you're merely exposing your jealousy at not being an early enough adopterborn earlier and into a rich family. After the first reboot, let say Bitcoin reaches a similar stage as it is at now, with 1% of the world populationSatoshi, Gavin, Magical Tux, and BitterTea using it. Oh no, those dreadful early adopters are back! Reboot Bitcoin again!


Hypocrisy? I give you a 1/10 troll score. Try again with logic.

Bitcoin = new currency, not a reboot of the dollar
wareen
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October 16, 2011, 10:36:30 PM
 #16

Quote
The view on this forum is that the world will come to their senses, throw out fiat currencies and move to something rational like Bitcoin. This of course means 6,000,000,000 people basically begging to use a resource owned by a relative handful of people.

You're asking for a way to sustainability and ignore the way towards your scenario by depicting this as if it would happen over night.

With the price going way down and difficulty following suit, it will become very easy again for new people to acquire Bitcoins. New, more efficient GPUs will also give newcomers an advantage over established mining enterprises.

Also, let's assume the price rises again in a few months - don't you think many who now hold the bag will cash out as soon as Bitcoin reaches, say 6 dollars again? Bitcoin will stay very volatile for a long time and there will be many more bubbles popping along the way - plenty of opportunities for new people to buy or earn a few cheap coins.
And even if there was a sudden hype of Bitcoins some time in the future - it will only result in just another bubble. You have to keep in mind that Bitcoin will _never_ be the only currency/store of value available, so nobody will suddenly be forced to use Bitcoin.

In the long term, the distribution of Bitcoin wealth will likely "even out" to similar disparity levels as wealth in traditional forms of value.

tl;dr: The "path to sustainability" for me lies in a slow steady growth of the average userbase - and that's what will happen most probably anyway.
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October 16, 2011, 11:58:14 PM
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In the mean time, I wanted to respond to this in particular. We are not Satoshi's "friends", we are the individuals that built all of the infrastructure surrounding Bitcoin, and believed in it before anyone else. If it does become widely adopted, should all the work done up until this point be dismissed as useless? Were it not for this work, would it ever become adopted in the first place?

I didn't mean to cast aspersions by calling anyone Satoshi's friends. I myself spend time corresponding with Satoshi. I have great respect for everything he did. I also have great respect for everything current Bitcoin operators are doing. As best as I can tell, people are investing close to $1,000 a day in electrical cost to maintain Bitcoin's accounting. That is a huge commitment of resources.

However, to the 6,000,000,000 current non-Bitcoin users, the lack of broad adoption creates a bit of a landed gentry situation. Even if we were to give the remainder of the BTC out to the masses for free to speed adoption, we still have a privileged class. It is pretty clear that knightmb could live the rest of his life off of his $5,000 investment (371,000 BTC). Then he could leave his estate to his children who could live the rest of their lives. That is the wonder of planned deflation. Each billion new Bitcoin users makes knightmb increasingly richer.

It just doesn't seem like the great masses are in a mood to create such a situation. Even if we were to convince them of the wonders of anonymous p2p crypto-currency (which I desperately want), it seems more likely that a general assembly would wave jazz hands at cutting knightmb and the other "more than equals" out of the loop.
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October 17, 2011, 12:01:53 AM
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As best I can tell 35.5% of all bitcoins have already been minted. These 7,473,950 coins are all property of existing bitcoin users. There seem to be about 41,280 registered members of this site. I'll be generous and say there are ten times as many bitcoin users as there are members. That means about 410,280 bitcoin owners with on average 18 BTC each. Clearly BTC ownership is more concentrated than this, but lets be egalitarian for the moment.

If we pretended all bitcoin owners were all Americans that is about 0.13% of the population. It's not of course. Bitcoin is intended to be a world currency. So 0.0068% of the world population own 100% of all current and at least 35.5% of all possible bitcoins.

The view on this forum is that the world will come to their senses, throw out fiat currencies and move to something rational like Bitcoin. This of course means 6,000,000,000 people basically begging to use a resource owned by a relative handful of people. Say we just minted up the remaining 13,526,050 BTC and scattered them to late adopters purely out of the kindness in our hearts. That means about 0.00225 BTC for each of them to use in rebuilding their economy. Sure 18 BTC on average doesn't make us feel very rich. But it is 8,000 times what everyone else would have if we stopped competitive minting today.

But we won't stop competing of course. Sometime around Pearl Harbor Day of next year Bitcoin will hit the 50% distributed mark.

----
By that day, how many active Bitcoin users and daily goods trades do there need to be to make a sustainable Bitcoin economy viable?
----

Because to potential new adopters, after that point Bitcoin is going to look like a new a 21,000,000 coin currency with a 10,500,000 coin pre-generation that went to the creator and his "friends". Certainly people will stop caring about Bitcoin long before they show up on our doorsteps with signs saying,

"We are the 99.9932%!"



We all know that 85.74932% of statistics are made up on the spot.  The only thing that makes that better is making approximations on those statistics.

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October 17, 2011, 12:17:34 AM
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We all know that 85.74932% of statistics are made up on the spot....

You had to quote my entire post to say that?
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October 17, 2011, 12:33:56 AM
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I'm convinced that come block 210,000, the discussion as to whether the 21 million is a good idea will pop up, and whether we should go with what some have called "inflatacoin".

The dynamics of this would make an interesting discussion. I mean who would get to vote? It seems like those with the coins would be the ones granted the vote. However, if the future adoptees don't agree with that vote, then any resolution doesn't bind them. They can either go elsewhere or not-adopt any coin.

I don't see how somebody having more credits than the other could pose a technical problem.

It doesn't cause a technical problem. It causes a perception problem. However the plausibility of the system becoming widely adopted is based purely on the perception of the potential adoptees.

tl;dr: The "path to sustainability" for me lies in a slow steady growth of the average userbase - and that's what will happen most probably anyway.

I guess the point of my post was that, from my point of view, the likelihood of "slow steady growth" becomes less plausible as the percentage of generated coins grows. And at some point you need to hit geometrically increasing growth. That should come sooner rather than later.

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