Limited coins and hoarding

[DeathAndTaxes]

I think you're fairly wrong here. Setting up this kind of infrastructure is incredibly difficult. There are only 2 major CC providers. There is only 1 major internet payment service. All these services charge around 3%. What makes you think that competitors to bit-pay will pop up all over the place and bring this fee down? Bit-pay is going to need all kinds of BTC and USD capital on demand.

VISA/MC are a monopoly with massive barriers to entry thus price is high and will remain high. BitPay is a first mover and exploiting that to retain high margins but the barriers to entry are negligble.  I mean it is:
* server
* some modified shopping cart software
* exhcange accounts w/ API linkups
* small amount of capital
* some advertising.

This isn't a slam against Bitpay but any company w/ $100K could build an equivelent or better service.  

No barriers to entry = lower prices.  

Lastly as an ex online merchant if you think CC "costs" 3% you are naive (or already know that isn't true).  I sold phone cards online in late 90s.  Pretty much in the dark ages of the commercial internet when most websites were manual and clunky.  Designed an interface to automate phone card and sold "virtual phone cards".  Obviously a business with instant delivery of cash-like product would love Bitcoin.  I used sophisticated fraud detection/scoring/tracking and still had 5% to 7% charge back rate.   Eventually I sold all my software, and domain names not because of fraud (which although high and costly was still manageable on a product w/ 30%+ markup) but because I saw the writing on wall in the rise of "cheap" cellphone plans w/ long distance included.  My cost between fraud, chargeback fees, (oh the fun of getting an EXTRA $30 loss on top of the fraud), merchant account costs, authorize.net fees, fraud tracking fees, swipe fees, and discount rate was like 7% to 10% of gross revenue.

So even Bitpay would have been an up to 7% savings.  In reality I would expect long term a Bitpay like service to be closer to 1%.

[1714822535]

1714822535

[1714822535]

1714822535

[Etlase2]

A wise man once said . . .

The problems mentioned stem from a confusion about what Bitcoin is. There is a naive idea that world governments might adopt Bitcoin, and it might become the worldwide currency and so it might impact the economy because of problems associated with inflation and deflation of the money supply and such. Don't worry, that's not going to happen. USGov will stick with the USD whatever happens - and so it is only inflation/deflation in the USD that you need to worry about if you're a USian.

You should either refute that or stop repeating yourself.

It doesn't matter if the world or the US adopts bitcoin or not. I don't expect it to replace fiat currency. However, that doesn't mean that there will be no bitcoin economy. It doesn't mean that no one will be hurt. And it certainly doesn't stop people from buying in with their real wealth under the mistaken idea that this is in any way a fair(er) system. The group think around here has something to gain by always saying rally when the price moves up, opportunity when the price moves down. There need to be people saying different.

Anyway, Bitcoin holds the promise of removing the 5% transaction tax levied by the CC companies on all of us, making us all wealthier. You shouldn't let your begrudgery towards the prescient early adopters sour your attitude to the greater good of the whole system.

There was no prescience involved, only pyramid. *Maybe* it would have taken a lot longer to reach a critical mass if the coin distribution was fairer, or maybe it would have just attracted a crowd that really believes in improving our monetary system, rather than how to make a buck for nothing. But now you have probably two or three dozen people that could strike fear into the heart of anyone saving bitcoins and might just eventually cause its downfall. That remains to be seen.

VISA/MC are a monopoly with massive barriers to entry thus price is high and will remain high. BitPay is a first mover and exploiting that to retain high margins but the barriers to entry are negligble.  I mean it is:
* server
* some modified shopping cart software
* exhcange accounts w/ API linkups
* small amount of capital
* some advertising.

This isn't a slam against Bitpay but any company w/ $100K could build an equivelent or better service.  

No barriers to entry = lower prices.

"When will you expand to other countries?
 To operate within the law, we need a legal company established, an office location, and a bank account in every country that we operate. This will take time and money to expand around the globe and comply with all laws and regulations."

I'd say that's a pretty big barrier to entry.

Lastly as an ex online merchant if you think CC "costs" 3% you are naive (or already know that isn't true).

:shrug: Well established, high volume merchants pay less than 3%, so it probably evens out in the actual cost to the economy. Just because you ran a small-time business selling a high-risk fraud item online does not mean that is the case for everyone. It is certainly a big boon for small businesses if bit-pay can deliver. But, as laws are starting to regulate a lot of these fees, banks are starting to instead pass the "costs" of scamming the entire economy onto the consumer in the form of monthly charges and so on. So it is likely that the price of using credit cards will go down for businesses, but consumers are still footing the bill in the end. So it would be nice if bitcoin could live up to its promise of being an alternative way to store your wealth.

[DeathAndTaxes]

:shrug: Well established, high volume merchants pay less than 3%, so it probably evens out in the actual cost to the economy. Just because you ran a small-time business selling a high-risk fraud item online does not mean that is the case for everyone. It is certainly a big boon for small businesses if bit-pay can deliver. But, as laws are starting to regulate a lot of these fees, banks are starting to instead pass the "costs" of scamming the entire economy onto the consumer in the form of monthly charges and so on. So it is likely that the price of using credit cards will go down for businesses, but consumers are still footing the bill in the end. So it would be nice if bitcoin could live up to its promise of being an alternative way to store your wealth.

The underlined portion is 100% false.   "cost" =/= fees.  My discount rate was 2.59% (granted today it is unlikely a high risk merchant like I was would have a discount rate that low but banks were equally clueless on how to price risk in the early years of the commercial internet).

True cost of credit cards is
1) CC fraud - merchant loses 100% of sale.  If 2% of sales are fraudulent then the cost is 2% of gross
2) chargeback fees - $30 per chargeback is an average.  This quickly can add up.  10,000 sales per month and 2% are fradulent you are looking at $72,000 a year in chargeback fees.
3) so called "friendly fraud".  consumer gets the item and doesn't like it or decides they don't want it.  If you refuse because say it is >30 days the report it was fraud (although it isn't).  Either you eat the cost or CC does a chargeback and you eat the cost + chargeback fee.
4) merchant account fees.  $30 to $50 per month
5) swipe fee.  Usually $0.30 which doesn't matter on high ticket items but on small ticket items it adds up.  If your average ticket is $30.00 than that is another 1% there.
6) anti-fraud fees.  There are databases and heuristic programs to flag potential fraud.  They are essential and tend to run $100+ a month in gateway fees plus another $0.30 to $0.50 per swipe.  They don't catch all fraud.

CC are great for VISA/MC.  They don't take any risk. If there is fraud the merchant eats it.  Banks raising rates has nothing to do with fees or fraud it is just greed.  The merchants pay for all the fees AND then they also pay for all the fraud.  However it has become a requirement to do business.

I don't know if Bitcoin will succeed BUT please don't think CC cost 3%.  That is a myth.  

[Xenland]

TL:DR

Sounds like OP wants to do something fishy but I'm not accusing him of anything.. Keyword "sounds like"

Either way hoarding will provide more value to bitcoin however... the problem is there is nothing to spend that value until you convert to fiat.



So I will say this

LESS SPECULATION MORE PRODUCTS AND SERVICES!!!!

[Etlase2]

The underlined portion is 100% false.   "cost" =/= fees.  My discount rate was 2.59% (granted today it is unlikely a high risk merchant like I was would have a discount rate that low but banks were equally clueless on how to price risk in the early years of the commercial internet).

Drama queen. 2% of sales are not fraudulent (wikipedia says 0.07%). Again, just because 2% of YOUR sales in a high-risk, fraud prone market were fraudulent does not mean that this is the average. POS transactions carry nowhere near the risk, and since the 90s almost all merchants require zip codes and CCV codes which undoubtedly has lowered the risk since.

Most data I can find shows 1.5-1.8% is the typical percentage fee, and 0.15-0.21 (new maximum as of october) is the swipe fee. Yes there are other fees and time and paperwork, but the more business you do with CCs, the less of an impact this has.

Every news article I have found shows that about $2 of every $100 goes to credit card fees (this would include chargebacks and other risks as these costs must be passed on to the consumer), and this obviously includes cash transactions too since products are priced with the costs of accepting CCs in place.

And again, regulation can try to take away banking profits that they feel they deserve, but banks will find another way to stick it to the consumer.

[ElectricMucus]

There is a problem with hoarding bitcoins too much but I don't think limited supply is the main reason it is done so much.

In comparison to gold it is also very much hoarded but also used for circulation. The difference with gold is however there are no penalties for hoarding too much.

With gold after a certain amount it becomes too cumbersome to move it around and this also somewhat sets it's value. With gold you can still do any reasonable sized transfer of wealth for almost all purposes.
And while buying something like a larger house or spot of land is and was always possible to transport comfortably with bitcoin there are no limits.

Once bitcoin would become a major currency it would be possible to comfortably buy up whole industries with it, that is something that was never before possible. I impute that the large hoarders are planning exactly for such a coup, which is why I am against a wide spread adaption till these problems are solved.

[cbeast]

Nobody is hoarding bitcoins. They are cheaper than dirt and there's a huge surplus for sale.

[Maged]

"When will you expand to other countries?
 To operate within the law, we need a legal company established, an office location, and a bank account in every country that we operate. This will take time and money to expand around the globe and comply with all laws and regulations."

I'd say that's a pretty big barrier to entry.

Huh? That's practically the bare minimum any business would need, regardless of the industry. Sure, it's not something that your average middle-class person could do on their own, but in the business world, that's cheap - almost pocket change.

If you're inferring that a competitor needs to operate in several countries in order to compete with Bit-Pay once they do, that's wrong. That business is one such that each local subsidiary would be pretty much independent. The only things gained in the industry that Bit-Pay is in by serving additional countries is that you don't need to re-write your site's code, and the marketing efforts aren't wasted toward people who live in countries that you don't serve. A good part of the code problem would go away if someone released open-source code that does what they do, and the marketing problem doesn't matter all that much if you're targeting your ads properly.

[RandyFolds]

It is not siphoning in your book because that doesn't fit your view of bitcoin. But the fact remains that bitcoin is designed to make later adopters pay more value to acquire coins. I'm pretty sure I said, in this thread, that a (relatively) fixed supply of money was a big part of causing the great depression because of a deflationary spiral. Bitcoin can do absolutely nothing to fix a deflationary spiral except have early adopters release the hoards. So you can trust the wiki that's written as if an 18-year-old fresh out of econ 101 wrote it, or you can at least wonder why all modern economists (even those who are not, believe it or not, connected to the federal reserve) believe that deflation is bad for growth. And that deflation immensely benefits the holders of a currency over the spenders of a currency. Which, by and large, means those who already have a lot of the currency. If the threat of supply inflation exists this would reduce the value of their holdings, so they are encouraged to spend and invest.

How many times do you think these guys can cash out? It's part of the volatility of the new market. You don't seem to understand that a one-time event has no real bearing upon bitcoin unless that one event is the cracking of SHA-256.

Stocks get dividends for one. They gain value independently of the demand for those stocks. And each share is still a share of the company whether or not you want to believe it.
And gold failed as a currency. If bitcoin is a stock and not a currency, what exactly are we investing in? That's what I want to know. And why is bitcoin touted as a replacement currency when it obviously is not? It can't be both a stock and a currency. If it acts similarly to both, don't you think that's a little fishy? Like, greater fool-like fishy?

Stock gains value independently of the demand for those stocks? Really? Do you understand how a stock market works? And basic supply and demand economics? Good, now put the two together.

If people stopped calling bitcoin a store of value and instead said "it's a stock-like thing that gains or lowers in value purely based on supply or demand but has no backing of any kind," what do you think people would think of it? Do you think they'd be clamoring to buy in? Sure gold is *somewhat* similar, but there is no yet known finite supply of gold, and if the price of gold increases excessively, more people will effort mining gold. And nobody was handed 10% of all the gold in existence for a few pennies.  

Gold is most definitely finite. Do you understand how quantification works? Do you agree that the earth is not infinitely large? Good, now put the two together.

No, I propose telling everybody who thinks of putting a penny into bitcoin that they are competing for a market of 10% of the total digital trash tokens in existence while a few people (who are anonymous and untraceable) control the rest and could sell at any time. So bear that in mind when you think the price has nowhere to go but up.

Refer to the above.








Side Note:
MoonShadow, I dug the history lessons.

[Etlase2]

Bitcoin can do absolutely nothing to fix a deflationary spiral except have early adopters release the hoards.

How many times do you think these guys can cash out? It's part of the volatility of the new market. You don't seem to understand that a one-time event has no real bearing upon bitcoin unless that one event is the cracking of SHA-256.

Do you understand that: 1) if early adopters release cash, it is inflating the money supply, thus "fixing" a deflationary spiral 2) this can only be done so many times and each time generally to a lesser degree 3) ergo I understand what I said and I said what I meant rather clearly. There is no permanent fix for a deflationary spiral in the bitcoin economy. Other than "people don't believe in a value of what they need to pay for things" from the esteemed wiki.

Stock gains value independently of the demand for those stocks? Really? Do you understand how a stock market works?

Apparently you haven't a clue. What a surprise coming from a mouthbreathing bitcoin proponent. http://en.wikipedia.org/wiki/Dividend

Gold is most definitely finite.

Where did I say gold was infinte? Do you think that by putting words in my mouth you somehow invalidate what I actually said? I said there is "NO YET KNOWN FINITE SUPPLY". As in, we don't yet know how much there is. Perhaps my wording wasn't as clear as it could be (finite was a bit ambiguous), but you'd have to be among the dumbest on the planet to infer that I meant the supply was infinite. Or you think I'm among the dumbest on the planet, but you don't even know what a dividend is so I'll leave it at that.

[RandyFolds]

Bitcoin can do absolutely nothing to fix a deflationary spiral except have early adopters release the hoards.

How many times do you think these guys can cash out? It's part of the volatility of the new market. You don't seem to understand that a one-time event has no real bearing upon bitcoin unless that one event is the cracking of SHA-256.

Do you understand that: 1) if early adopters release cash, it is inflating the money supply, thus "fixing" a deflationary spiral 2) this can only be done so many times and each time generally to a lesser degree 3) ergo I understand what I said and I said what I meant rather clearly. There is no permanent fix for a deflationary spiral in the bitcoin economy. Other than "people don't believe in a value of what they need to pay for things" from the esteemed wiki.

Stock gains value independently of the demand for those stocks? Really? Do you understand how a stock market works?

Apparently you haven't a clue. What a surprise coming from a mouthbreathing bitcoin proponent. http://en.wikipedia.org/wiki/Dividend

Gold is most definitely finite.

Where did I say gold was infinte? Do you think that by putting words in my mouth you somehow invalidate what I actually said? I said there is "NO YET KNOWN FINITE SUPPLY". As in, we don't yet know how much there is. Perhaps my wording wasn't as clear as it could be (finite was a bit ambiguous), but you'd have to be among the dumbest on the planet to infer that I meant the supply was infinite. Or you think I'm among the dumbest on the planet, but you don't even know what a dividend is so I'll leave it at that.

It sure does seem like you are pretty dumb. What does linking dividends have to do with your claim that supply and demand do not affect the prices of stock? Why is insolvent Groupon still worth money?

[wareen]

Once bitcoin would become a major currency it would be possible to comfortably buy up whole industries with it, that is something that was never before possible. I impute that the large hoarders are planning exactly for such a coup, which is why I am against a wide spread adaption till these problems are solved.

How do you think the problem of somebody owning a large amount of Bitcoins could be solved?

It can be argued, that the 2009 miners acquired their coins at negligible cost and this is an inherent disadvantage for everybody wanting to acquire coins now. The sad fact however is, that there are many many people on this world, who could just buy, say 100k BTC, at (for them) negligible cost even today. Once any potential new currency started to take off, expect the big players to jump on and buy huge chunks of the pie.
It is completely irrelevant how such a currency would be designed - even if you somehow made sure that every person on this planet gets a fair share initially - once they gain in value, the wealthy would just exchange some of their assets (fiat, gold, real estate, food,...) to acquire large chunks of the new currency.

I think the basic problem you would have to solve is that of the highly unequal wealth distribution on this world and while I wished nothing more than for this problem to go away, I fear you won't succeed.

This problem is however nothing Bitcoin or any other new currency could do anything about. I would be happy to hear your ideas however!

[tvbcof]

Once bitcoin would become a major currency it would be possible to comfortably buy up whole industries with it, that is something that was never before possible. I impute that the large hoarders are planning exactly for such a coup, which is why I am against a wide spread adaption till these problems are solved.

How do you think the problem of somebody owning a large amount of Bitcoins could be solved?

It can be argued, that the 2009 miners acquired their coins at negligible cost and this is an inherent disadvantage for everybody wanting to acquire coins now. The sad fact however is, that there are many many people on this world, who could just buy, say 100k BTC, at (for them) negligible cost even today. Once any potential new currency started to take off, expect the big players to jump on and buy huge chunks of the pie.
It is completely irrelevant how such a currency would be designed - even if you somehow made sure that every person on this planet gets a fair share initially - once they gain in value, the wealthy would just exchange some of their assets (fiat, gold, real estate, food,...) to acquire large chunks of the new currency.

I think the basic problem you would have to solve is that of the highly unequal wealth distribution on this world and while I wished nothing more than for this problem to go away, I fear you won't succeed.

This problem is however nothing Bitcoin or any other new currency could do anything about. I would be happy to hear your ideas however!

I think you've hit the nail on the head.  Rich people will buy most of just about anything which pops up.  A fascinating aspect of  Bitcoin, for me, is that it is ultimately supported by users and they can withdraw that support much more practically than they could under a gold-backed system or one enforced by entrenched political apparatus.

My idea for a solution:

1) consider and treat BTC (and other currencies) as a solution for transferring value rather than holding it.

2) use BTC as a 'backing store' for an almost endless variety of cryptocurrencies which evolve and are adopted based on their usefulness to the end user.

Being the grand-daddy of cryptocurrencies with a strong existing block chain, a good history of security, and being 1/3 through it's development into maturity (once the time domain is switched to inflation), it is a natural choice as a backing store.

The value that BTC would have would be in lending support to alternate crytocurrencies, and the successful cryptocurrencies will be the ones which strike a good balance of reward to all of the users of the system as a whole...particularly the end-users.  The holders of BTC will be forced into competition with one another and the more 'altruistic' they are, the stronger their competitive edge will be.

[ElectricMucus]

I think the basic problem you would have to solve is that of the highly unequal wealth distribution on this world and while I wished nothing more than for this problem to go away, I fear you won't succeed.

This problem is however nothing Bitcoin or any other new currency could do anything about. I would be happy to hear your ideas however!

Well, at first the geometric series could have been chosen differently, awarding early adoption on one thing, making them a new elite is another. The block reward could start low, increase steadily and then decrease again at the end of the distribution cycle.
If I would ever advocate an alternate cryptocurrency as a replacement this is what I would vouch for. But I am still not convinced the problem can't be solved in the current blockchain. The falling prices might do something about that, or not or possibly another incentive which brings me to my second point:

As for the inherently presence of a wealth differential in society we would need a system triggering rapid economic growth by enabling ever person to participate on equal terms, this has to be done from day 0 and the development would have to be either so fast that a substantial part of the world economy joins the new system within a single day (the media would bring critical mass within 3 days) or it would have to be so subversive that the hierarchical paradigm suspects nothing until it is too late.
The first is pretty much out of reach for bitcoin but the latter might still be a possibility once we return to a smaller, more involved community.

[Vandroiy]

I never understood why deflation is supposed to be so horrible. We have massive other problems with money, what's the big deal in some initial liquidity troubles?

Initial distribution is largely irrelevant; someone hoarding from the start can sell his coins only once. So it will happen a few times, lol volatility. Life goes on. Speculators will have to take this into account and do some calculating, then the problem will fade as someone figures it out. A bit of the money will go to these speculators. Oh well.

What's the big mythical problem here? The problems with international payment are huge, it's nowhere near the scale of some money supply trouble.

What is more, it's all out in the open. Once people know how the market behaves, rules won't suddenly change as they did in the Euro in the last years. This is very, very, extremely important! I can live with quite a few issues if I get clear and stable rules in return. The deflation issue just isn't that important.

[Etlase2]

I think the basic problem you would have to solve is that of the highly unequal wealth distribution on this world and while I wished nothing more than for this problem to go away, I fear you won't succeed.

The problem of unequal wealth distribution can't be solved by a currency. The problem of the currency facilitating this distribution can, or at least it can be mitigated, if you agree with the Austrian school of thought that a government/bank controlled money supply really only benefits those with existing wealth. However...

Initial distribution is largely irrelevant; someone hoarding from the start can sell his coins only once. So it will happen a few times, lol volatility. Life goes on. Speculators will have to take this into account and do some calculating, then the problem will fade as someone figures it out. A bit of the money will go to these speculators. Oh well.

"Initial distribution is largely irrelevant" is a fun factoid that everybody loves saying around here. Someone hoarding from the start does not need to sell his coins only once if he holds a huge portion of the total supply to ever be produced, that in fact would be silly in a totally fixed supply of money. As I pointed out earlier in the thread, it would currently take about 1% of the total supply in existence to drop the market value of BTC in half.

Now, the bigger the market depth, the less BTC it takes to pull a fortune of wealth out of the economy (assuming hoarders continue to hoard anyway). If BTC were worth $1000 each, it would take 1,000 coins to be a millionaire. Assuming the economy continues to slowly adopt BTC as its currency of choice, the 1.6 million bitcoins mined at a difficulty of 1 could be spread over generations and generations of descendants who would never have to lift a finger to become incredibly wealthy. This is the solution to fixing the wealthy who stay wealthy in fiat currency?

All it does is change one Man for another, it doesn't solve anything (lol except payment processing). And it encourages misguided individuals to believe they might be part of a new wealthy elite for doing nothing but "smart, early investing" with a few dollars of electricity and so they do the advertising work for the even earlier adopters. "The Bitcoin Dream" lol. Congratulations on continuing to be pawns for somebody else.

[ElectricMucus]

"Initial distribution is largely irrelevant" is a fun factoid that everybody loves saying around here. Someone hoarding from the start does not need to sell his coins only once if he holds a huge portion of the total supply to ever be produced, that in fact would be silly in a totally fixed supply of money. As I pointed out earlier in the thread, it would currently take about 1% of the total supply in existence to drop the market value of BTC in half.

I don't think that a limited supply necessarily leads to this scenario. It enables it yes but until now, in any limited commodity this was prevented by the impossibility to move, store and protect the asset for a single individual. If you take gold as an example, one could store a large amount of wealth in one place but it would be impossible to move it out of the way if an attacker approaches, could not use a significant fraction of it to pay for a very large transaction and since it is a physical object it cannot be stored away for eternity.

I think if bitcoin would mimic some of those limitations we wouldn't see people with 5-6 figure wallets.

Now, the bigger the market depth, the less BTC it takes to pull a fortune of wealth out of the economy (assuming hoarders continue to hoard anyway). If BTC were worth $1000 each, it would take 1,000 coins to be a millionaire. Assuming the economy continues to slowly adopt BTC as its currency of choice, the 1.6 million bitcoins mined at a difficulty of 1 could be spread over generations and generations of descendants who would never have to lift a finger to become incredibly wealthy. This is the solution to fixing the wealthy who stay wealthy in fiat currency?

I agree that if nothing changes with the bitcoin wealth pyramid it would be a less preferable system than even the current system, this however might change. What would be needed is an incentive to use these large holdings not for hoarding but for spending, way before the price reaches anywhere near that numbers. If this never happens then we would either face a dire future were the imminent threat of economic cornering would lead to violence or the failure of bitcoin be used as originally intended.

[wareen]

The problem of unequal wealth distribution can't be solved by a currency.

This is the solution to fixing the wealthy who stay wealthy in fiat currency?

I was under the impression that you agreed that a currency cannot solve this problem?

it encourages misguided individuals to believe they might be part of a new wealthy elite for doing nothing but "smart, early investing" with a few dollars of electricity and so they do the advertising work for the even earlier adopters. "The Bitcoin Dream" lol. Congratulations on continuing to be pawns for somebody else.

You don't know what those with a large Bitcoin position do or do not contribute to Bitcoin. They sure have the highest incentive to see Bitcoin succeed. Yes there may be some that expect to get something for nothing, but unfortunately that's life. On the other hand many of the early adopters are developers for example.

I don't think that a limited supply necessarily leads to this scenario. It enables it yes but until now, in any limited commodity this was prevented by the impossibility to move, store and protect the asset for a single individual. If you take gold as an example, one could store a large amount of wealth in one place but it would be impossible to move it out of the way if an attacker approaches, could not use a significant fraction of it to pay for a very large transaction and since it is a physical object it cannot be stored away for eternity.

I think if bitcoin would mimic some of those limitations we wouldn't see people with 5-6 figure wallets.

I agree, but mainly because it would be much less useful.

I agree that if nothing changes with the bitcoin wealth pyramid it would be a less preferable system than even the current system, this however might change. What would be needed is an incentive to use these large holdings not for hoarding but for spending, way before the price reaches anywhere near that numbers. If this never happens then we would either face a dire future were the imminent threat of economic cornering would lead to violence or the failure of bitcoin be used as originally intended.

I don't think that it is fair to call Bitcoin a less preferable system due to its wealth pyramid. Even the largest Bitcoin holder owns currently less than 1 million USD worth of Bitcoin. That's less than 0.001% of the currently largest USD holder and "only" about 10,000 times the yearly income of the poorest people on this planet. In fiat currency the disparity between richest and poorest is more like 100,000,000:1

One single Bitcoin would have to reach a value equal to about 150,000 USD in order to make the person with the most Bitcoins equally rich as Carlos Slim. Apart from the fact that this will simply never happen, the Bitcoin distribution would almost certainly become less skewed on the way to such price levels. I am dead certain that most of the non-lost coins mined in 2009 would be sold well before 1 BTC reaches 10,000 USD. Please don't forget that even IF Bitcoin would one day become extremely valuable, it would still be a very bumpy ride (certainly not a straight way up) - this makes it even more unlikely that somebody clings to his coins till the very last.

Bitcoin is not as fair as it should be, but its wealth distribution will certainly always be fairer than that of the dollar.

[ElectricMucus]

One single Bitcoin would have to reach a value equal to about 150,000 USD in order to make the person with the most Bitcoins equally rich as Carlos Slim. Apart from the fact that this will simply never happen, the Bitcoin distribution would almost certainly become less skewed on the way to such price levels. I am dead certain that most of the non-lost coins mined in 2009 would be sold well before 1 BTC reaches 10,000 USD. Please don't forget that even IF Bitcoin would one day become extremely valuable, it would still be a very bumpy ride (certainly not a straight way up) - this makes it even more unlikely that somebody clings to his coins till the very last.

Bitcoin is not as fair as it should be, but its wealth distribution will certainly always be fairer than that of the dollar.

You'd have to extrapolate such a situation, what people adopting bitcoin at this point would be able to obtain. Then the differential looks way more steep. Also the problem is not that under a scenario where bitcoin value would rise dramatically large holders could exchange it for a large sum of fiat money, but rather the effect on bitcoin itself.
There is now way around it, someone owning a significant portion of the total supply is not desirable, at any point. Now it is less drastic but it has to change in order (and what I see from your theory it might) to enable the development of a healthy economy.

I see it from that perspective:  Carlos Slim doesn't own a significant portion of the worlds wealth.

Bitcoin for me is a closed system.

[Etlase2]

I was under the impression that you agreed that a currency cannot solve this problem?

A currency can't solve the fact that there are a limited amount of resources to go around. The problem that the Austrian school has with fiat currency is that central banks inflate the supply by giving those who already have wealth cheap access to new currency first. Everybody else down the line has to pay more value in to take on debt. This benefits them doubly.

For example: Bank of America gets a 0.25% interest loan from the central bank for 1 million dollars. Bank of American turns around and loans 95% this money directly to consumers at a 4% interest rate.
Not only does Bank of America profit by the interest made on the loan, they also profit on the 5% they didn't loan that can buy products and services right now before the value of the dollar reflects the fact that 1 million dollars has been created. A big part of the 5% example would be paying CEOs.

Pretending that just giving away 10-20% of all the money to ever exist to a few dozen people is a better system is downright ridiculous. You don't like banks making all the profit off of inflation, but you're totally cool with some anonymous fart knockers doing it? The bitcoin elite are akin to bank CEOs with their ridiculous paychecks that are earned by essentially taking value away from everyone else. All in all, it is the exact same scenario except that hopes and wishes say that the bitcoin CEOs will cash out all their chips at once and let the economy work itself out. Except they already proved that that's not what they intend to do by the $30 run-up. They PROVED it. Yet many of you are still unwilling to believe that the bitcoin CEOs are just looking for that gigantic paycheck just like the bank CEOs, and the only way they can do that is by taking value away from others. Except now instead of a system that is at least somewhat accountable to the people, they are anonymous overlords that can do whatever they want, whenever they please. Perhaps they will only trickle in and let their descendants profit for ages to come; perhaps they will decide that they really want that island, and they don't particularly care if they crash the economy.

Since they waited so long, and since the distribution is so ridiculously flawed, there is really no way they can do anything to fix it. They are guaranteed to, at some point, steal a metric fuckton of wealth from everyone who invests into bitcoin. If they sell a huge chunk now, the economy is likely to collapse and never recover as all faith is lost. If they trickle in, they are the same as bank CEOs vulturing from the economy at will. The only way they can really solve it is by destroying coins. Let me know in what parallel universe that happens.

A) Destroy the economy in one shot (for each person that has a big chunk of coins)
B) Be a bank CEO
C) Destroy coins

A means it's a pyramid/pump n dump. B means it's effectively no different from fiat currency (the pyramid just has different overlords). C is not something that is likely to ever happen.

You don't know what those with a large Bitcoin position do or do not contribute to Bitcoin.

Isn't it so great how you can use the appeal to ignorance for basically every argument for bitcoin? Why is it that I don't know what those with a large bitcoin position do or do not contribute to bitcoin? Oh yeah, because the creator(s) made every effort to be COMPLETELY FUCKING ANONYMOUS. And the design of the protocol itself and the fact that the exchanges are anonymous in the protocol certainly doesn't help.

I don't think that it is fair to call Bitcoin a less preferable system due to its wealth pyramid. Even the largest Bitcoin holder owns currently less than 1 million USD worth of Bitcoin. That's less than 0.001% of the currently largest USD holder and "only" about 10,000 times the yearly income of the poorest people on this planet. In fiat currency the disparity between richest and poorest is more like 100,000,000:1

One single Bitcoin would have to reach a value equal to about 150,000 USD in order to make the person with the most Bitcoins equally rich as Carlos Slim. Apart from the fact that this will simply never happen, the Bitcoin distribution would almost certainly become less skewed on the way to such price levels. I am dead certain that most of the non-lost coins mined in 2009 would be sold well before 1 BTC reaches 10,000 USD. Please don't forget that even IF Bitcoin would one day become extremely valuable, it would still be a very bumpy ride (certainly not a straight way up) - this makes it even more unlikely that somebody clings to his coins till the very last.

Bitcoin is not as fair as it should be, but its wealth distribution will certainly always be fairer than that of the dollar.

there are so many new types of fallacious arguments that need to be described just for bitcoin. It is like a petri dish for logicians.