Bitcoin will be unable to break its shell

[pandher]

Inviting constructive criticism, please dont post one line replies that hold no meaningful points.

So the question is, how do we picture Bitcoin as a decentralized revolution when a very high number of coins are hoarded by early adopters which results in quite the opposite. To me, the whole mining system looks like bull. Its like giving away lots of coins in first come first served basis. A currency shouldn't be given away like this, it will only lead to concentration of the wealth to a low percentage of people. This means that the original satoshi idea was flawed.

Its right that we are experiencing something completely different than traditional fiat and we cant predict how things are going to be, but i dont see bitcoin expanding beyond a - gambling, trading and speculative niche market.

[1715275313]

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[Luno]

You know at first, up until 2011 wallets mined coins by themselves. Everyone interested in bitcoin downloaded the wallet software, and started generating bitcoins to their own wallet by ticking a box.

Very fair and simple.

[spazzdla]

You know at first, up until 2011 wallets mined coins by themselves. Everyone interested in bitcoin downloaded the wallet software, and started generating bitcoins to their own wallet by ticking a box.

Very fair and simple.

Like primecoin currently .

IMO BTC will become the gold of cryptos.. horded, held in mass by a few and to become one of if not the best store of wealth.

Something like dogecoin will becoming the spending currency.

As for the creation of money..  at least there are no barriers to entry for people with bitcoin.. TRY to get in on the fractional banking system and tell me how it goes for you.  I don't mean take out a loan.. I mean make a loan out of thin air and lend it to someone on the promise that other people owe you money...  In the 1200's we hung people for this.. now we give them massive bonouses for stealing from us..  disgusting.

[arepo]

Inviting constructive criticism, please dont post one line replies that hold no meaningful points.

So the question is, how do we picture Bitcoin as a decentralized revolution when a very high number of coins are hoarded by early adopters which results in quite the opposite. To me, the whole mining system looks like bull. Its like giving away lots of coins in first come first served basis. A currency shouldn't be given away like this, it will only lead to concentration of the wealth to a low percentage of people. This means that the original satoshi idea was flawed.

Its right that we are experiencing something completely different than traditional fiat and we cant predict how things are going to be, but i dont see bitcoin expanding beyond a - gambling, trading and speculative niche market.

if the mining system "looks like bull" you probably don't know enough about it. miners are always in competition with each other, and you can enter or exit the mining pool whenever you wish. not really first come, first served.

--arepo

[pandher]

if the mining system "looks like bull" you probably don't know enough about it. miners are always in competition with each other, and you can enter or exit the mining pool whenever you wish. not really first come, first served.

--arepo

You probably didn't understand my question, i am actually talking about the early birds, not people with ASICS. And even if we talk about miners, why is so much precious energy being wasted to earn 0.00 of coins that a single person holds 5% of the total. The thing is that a currency should only be 'earned', not printed at home.

[Asrael999]

You are equating concentration of wealth - with centralization of control, they are slightly different things. Those fortunate few cannot create new bitcoins - nor can they exert control over the protocol, unless they sell coins to acquire significant volumes of mining equipment. They cannot create coins like a central bank, and they cannot influence the rate of coin supply without acquiring control of and then altering the protocol.
They can pressurise the price by selling coins, but the price could be pressurised by any major investment fund by pointing USD 1-5bn at Bitcoin and pressing buy or sell. To put that in perspective USD 5bn is just 0.0025% of Pimco's assets under management at the end of 2013.

[arepo]

if the mining system "looks like bull" you probably don't know enough about it. miners are always in competition with each other, and you can enter or exit the mining pool whenever you wish. not really first come, first served.

You probably didn't understand my question, i am actually talking about the early birds, not people with ASICS. And even if we talk about miners, why is so much precious energy being wasted to earn 0.00 of coins that a single person holds 5% of the total. The thing is that a currency should only be 'earned', not printed at home.

and again i can tell that you simply have a lack of understanding. i do not mean to be patronizing, at all -- you asked for constructive criticism! -- and it just seems now that you're moving the goalposts? you brought up miners in the OP...

anyway, all i meant to say is don't think it's fair to characterize mining as first come, first serve. also, miners are securing the network, that's why they're being rewarded. the protocol rewards miners for making the payment system secure, so in this way they "earn" the bitcoins by providing a service to the bitcoin economy.

edit: also, as if USD, the world's reserve currency, isn't just "printed at home [banks]"

--arepo

[RodeoX]

Inviting constructive criticism, please dont post one line replies that hold no meaningful points.

Like the title of the thread?
But seriously, you should search before posting. Your assertion has been made many times before and fully refuted by the fact that bitcoin is breaking out of it's shell. And has been for years now.

[5thStreetResearch]

Early adopters or anyone who wants to invest enough can hold large amounts of bitcoin and it still remains decentralized.  Holding large amounts of bitcoin doesn't give you any sort of special voter rights, its not a stock, its an open source protocol.

[zimmah]

Inviting constructive criticism, please dont post one line replies that hold no meaningful points.

So the question is, how do we picture Bitcoin as a decentralized revolution when a very high number of coins are hoarded by early adopters which results in quite the opposite. To me, the whole mining system looks like bull. Its like giving away lots of coins in first come first served basis. A currency shouldn't be given away like this, it will only lead to concentration of the wealth to a low percentage of people. This means that the original satoshi idea was flawed.

Its right that we are experiencing something completely different than traditional fiat and we cant predict how things are going to be, but i dont see bitcoin expanding beyond a - gambling, trading and speculative niche market.

why don't you create an altcoin with your own ideas and fix the flaws?

also:

You are equating concentration of wealth - with centralization of control, they are slightly different things. Those fortunate few cannot create new bitcoins - nor can they exert control over the protocol, unless they sell coins to acquire significant volumes of mining equipment. They cannot create coins like a central bank, and they cannot influence the rate of coin supply without acquiring control of and then altering the protocol.
They can pressurise the price by selling coins, but the price could be pressurised by any major investment fund by pointing USD 1-5bn at Bitcoin and pressing buy or sell. To put that in perspective USD 5bn is just 0.0025% of Pimco's assets under management at the end of 2013.

Most of the problems in today's world are directly or indirectly caused by the few persons who have the ability to literally print money, (the power to issue debt is also printing money, even if they aren't printing physical bills). It won't matter a lot if a few people have a lot of bitcoin, because once they spend them, they're spent, they can't simply print more. They could mine some more, but everyone can mine them, so the things are completely fair. But if i would print money, i'd be jailed, while if the feds print money, they don't get jailed.

[pungopete468]

The distribution of BTC wealth is actually spreading out; unlike other forms of money where the distribution is becoming more concentrated...

Check out this thread and donate to this guy if you like his work. Look at the distribution of coins since Jan of this year...

https://bitcointalk.org/index.php?topic=441336.0

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block#  281224  18/01/2014               num  %noOut   %dead   %of tot %of act  diff prev           value  %noOut  %vdead   %TotVal       diff prev
---------------------------------------------------------------------------------------------------------------------------------------------------
= 0                                 23514852   0.00%   0.00%  90.4307%                            0.00000   0.00%   0.00%   0.0000%         0.00000
= 1 satoshi (0.00000001 BTC)          404312  38.39%   8.86%   1.5549%  16.25%                    0.00404  38.39%   8.86%   0.0000%         0.00000
> 1 satoshi <= 0.001 BTC  ( ~1$ )     886869  82.60%  30.55%   3.4106%  35.64%                  176.95828  74.42%  10.98%   0.0014%         0.00000
> 0.001 BTC <= 0.1 BTC                727172  69.70%   9.69%   2.7965%  29.22%                15250.72224  74.92%  14.46%   0.1242%         0.00000
> 0.1 BTC <= 1 BTC                    245947  70.84%   9.14%   0.9458%   9.88%               113788.15782  76.08%  11.52%   0.9268%         0.00000
> 1 BTC <= 5 BTC                       98078  68.58%   9.46%   0.3772%   3.94%               240217.18620  70.37%   9.93%   1.9565%        0.00000
> 5 BTC <= 10 BTC                      30908  72.21%   8.58%   0.1189%   1.24%               240951.40354  74.20%   8.57%   1.9625%         0.00000
> 10 BTC <= 25 BTC                     24705  69.96%   8.99%   0.0950%   0.99%               411468.88705  71.48%   9.18%   3.3513%         0.00000
> 25 BTC <= 50 BTC                     50080  92.92%  74.48%   0.1926%   2.01%              2325632.07964  94.55%  79.65%  18.9415%         0.00000
> 50 BTC <= 75 BTC                      4493  71.56%  16.76%   0.0173%   0.18%               267891.63258  71.06%  15.27%   2.1819%         0.00000
> 75 BTC <= 100 BTC                     5528  82.31%   8.27%   0.0213%   0.22%               521398.01969  83.32%   8.35%   4.2466%         0.00000
> 100 BTC <= 500 BTC                    7622  70.62%   8.57%   0.0293%   0.31%              1700607.80414  72.06%   9.23%  13.8509%         0.00000
> 500 btc <= 1000 BTC                   1482  74.22%   6.75%   0.0057%   0.06%              1142898.58759  76.01%   7.01%   9.3085%         0.00000
> 1000 BTC                              1120  66.79%  10.62%   0.0043%   0.05%              5297668.25895  69.43%   6.39%  43.1478%         0.00000
                  Total Actives      2488316  69.82%  18.22%   9.5693% 100.00%             12277949.70148  76.04%  21.26% 100.0000%         0.00000
                  Total             26003168   6.68%   1.74% 100.0000%                     12277949.70148  76.04%  21.26% 100.0000%         0.00000

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block#  290455  13/03/2014               num  %noOut   %dead   %of tot %of act  diff prev           value  %noOut  %vdead   %TotVal       diff prev
---------------------------------------------------------------------------------------------------------------------------------------------------
= 0                                 27988899   0.00%   0.00%  91.2040%              95829         0.00000   0.00%   0.00%   0.0000%         0.00000
= 1 satoshi (0.00000001 BTC)          404226  38.46%   8.87%   1.3172%  14.98%        116         0.00404  38.46%   8.87%   0.0000%         0.00000
> 1 satoshi <= 0.001 BTC  ( ~1$ )     960400  81.72%  28.19%   3.1295%  35.58%       3290       205.46665  72.92%   9.38%   0.0016%         0.53271
> 0.001 BTC <= 0.1 BTC                801923  68.62%   8.70%   2.6131%  29.71%       4503     16643.93961  73.09%  13.10%   0.1331%       125.91011
> 0.1 BTC <= 1 BTC                    279701  70.15%   7.91%   0.9114%  10.36%       -417    128703.60240  75.62%  10.03%   1.0289%      -195.34508
> 1 BTC <= 5 BTC                      115620  68.61%   7.85%   0.3768%   4.28%        149    281142.09035  70.40%   8.31%   2.2476%       -48.72786
> 5 BTC <= 10 BTC                      34479  71.96%   7.48%   0.1124%   1.28%       -136    268161.60199  73.99%   7.49%   2.1438%      -992.15838
> 10 BTC <= 25 BTC                     27132  69.95%   7.96%   0.0884%   1.01%       -246    449792.35866  71.40%   8.18%   3.5958%     -4386.27554
> 25 BTC <= 50 BTC                     54919  93.03%  67.55%   0.1790%   2.03%        108   2549675.80086  94.66%  72.27%  20.3832%      7448.90613
> 50 BTC <= 75 BTC                      4685  70.54%  15.88%   0.0153%   0.17%        -27    279575.04900  70.06%  14.44%   2.2350%     -1522.37268
> 75 BTC <= 100 BTC                     5675  83.24%   7.68%   0.0185%   0.21%        -16    535713.99474  84.25%   7.76%   4.2827%     -1448.45178
> 100 BTC <= 500 BTC                    7937  70.52%   7.41%   0.0259%   0.29%          6   1806340.51304  72.78%   7.95%  14.4406%      1141.27544
> 500 btc <= 1000 BTC                   1537  74.17%   6.18%   0.0050%   0.06%          5   1190338.68540  76.17%   6.45%   9.5161%      4683.98318
> 1000 BTC                              1102  66.61%   7.89%   0.0036%   0.04%         -1   5002431.02187  68.14%   4.48%  39.9915%      -757.28839
                  Total Actives      2699336  69.52%  16.72%   8.7960% 100.00%       7334  12508724.12833  76.09%  19.70% 100.0000%      4049.98787
                  Total             30688235   6.11%   1.47% 100.0000%             103163  12508724.12833  76.09%  19.70% 100.0000%      4049.98787
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The number of wallets with 1,000+ XBT have decreased substantially. From Jan 18 the distribution of wealth in this category decreased by 3% while nearly every other area increased. Most of the 1,000+ XBT wallets are in cold storage so breaking them down into multiple different smaller wallets isn't very likely or desirable. More people are buying in and those who own the most coins aren't hoarding them...

Give it a few years and you won't be looking at the same distribution. Compare that to any centrally controlled system and you will see that they are becoming increasingly biased towards the wealthy...

[CurbsideProphet]

Inviting constructive criticism, please dont post one line replies that hold no meaningful points.

So the question is, how do we picture Bitcoin as a decentralized revolution when a very high number of coins are hoarded by early adopters which results in quite the opposite. To me, the whole mining system looks like bull. Its like giving away lots of coins in first come first served basis. A currency shouldn't be given away like this, it will only lead to concentration of the wealth to a low percentage of people. This means that the original satoshi idea was flawed.

Its right that we are experiencing something completely different than traditional fiat and we cant predict how things are going to be, but i dont see bitcoin expanding beyond a - gambling, trading and speculative niche market.

First off, Bitcoin is a proof of work, there's no giving it away.  Second, how else would you have it done?  It's no different than the early days of the gold rush, the miners who got there first got more shiny rocks than those that came thereafter.  The only other alternative is something like Ripple where everything is pre-mined and given out a small bit at a time but then you have a central authority doing the distribution.  I don't see any way to make distribution perfectly fair.  Life isn't fair.

[gannicus]

The problem with bitcoins are not the hoarders, spending bitcoin like idiots will not change it and make bitcoin become mainstream. What bitcoin needs is easier ways to convert it quickly into fiat money, which is which most people care about nowadays, regardless if you like it or not. If someone who has never heard of bitcoin wants to buy bitcoin today he or she must register in some exchange, send documents, wait confirmation, send deposit, wait confirmation, buy it, and transfer to the wallet. If someone wants to sell it, it is even worse, because the person must also do all this and hope for the money to arrive to his bank account. The real "bottleneck" of the bitcoin economy relies on 2 or 3 big exchanges which all the connection fiat-crypto happens, added to a few spare ATM around the world where people can at most buy bitcoin for a price much above the spot. Take gold for example. People hoard gold, banks probably are storaging a huge fraction of all the gold, but this does not matter to make gold "mainstream", because gold can be bought and sold easily around the world, which is not the case of bitcoin today. You may love bitcoin and have a thousand reasons to defend it like I do, but you all must admit that there is no practical way to trade (and when I say trade it is buy AND sell) bitcoins today and to make it worse one of the biggest exchanges just went bankrupt weeks ago. You may come and give me thousands of small bitcoins business that allow people to trade them quickly (I particularlly don't know any, but I suppose they exist) but that's still the problem - they are small, no one knows them, and that's why bitcoin is still unable to "break its shell". This shell will be broken the day I can buy and sell it quickly and with a huge depth on the buy and sell side.

[cbutters]

"gold will never be a good store of value because only gold miners have gold.... If gold were to be adopted only people who mine gold would be rewarded, therefore gold will never become a good store of value...."

Do you not realize how ridiculous this sounds? over time mining is less and less relevant.... as the mining shrinks until it is gone, and the bitcoin will flow out into the hands of many.

[Bonam]

So the question is, how do we picture Bitcoin as a decentralized revolution when a very high number of coins are hoarded by early adopters which results in quite the opposite. To me, the whole mining system looks like bull. Its like giving away lots of coins in first come first served basis. A currency shouldn't be given away like this, it will only lead to concentration of the wealth to a low percentage of people. This means that the original satoshi idea was flawed.

Miners aren't just given bitcoins for the heck of it, rather, people operating mining hardware are what allows the bitcoin network to function. Even after the block reward is zero, miners will continue to make money off transaction fees (assuming that BTC is successful). There has to be an incentive for people/businesses to process bitcoins.

[CurbsideProphet]

The problem with bitcoins are not the hoarders, spending bitcoin like idiots will not change it and make bitcoin become mainstream. What bitcoin needs is easier ways to convert it quickly into fiat money, which is which most people care about nowadays, regardless if you like it or not. If someone who has never heard of bitcoin wants to buy bitcoin today he or she must register in some exchange, send documents, wait confirmation, send deposit, wait confirmation, buy it, and transfer to the wallet. If someone wants to sell it, it is even worse, because the person must also do all this and hope for the money to arrive to his bank account. The real "bottleneck" of the bitcoin economy relies on 2 or 3 big exchanges which all the connection fiat-crypto happens, added to a few spare ATM around the world where people can at most buy bitcoin for a price much above the spot. Take gold for example. People hoard gold, banks probably are storaging a huge fraction of all the gold, but this does not matter to make gold "mainstream", because gold can be bought and sold easily around the world, which is not the case of bitcoin today. You may love bitcoin and have a thousand reasons to defend it like I do, but you all must admit that there is no practical way to trade (and when I say trade it is buy AND sell) bitcoins today and to make it worse one of the biggest exchanges just went bankrupt weeks ago. You may come and give me thousands of small bitcoins business that allow people to trade them quickly (I particularlly don't know any, but I suppose they exist) but that's still the problem - they are small, no one knows them, and that's why bitcoin is still unable to "break its shell". This shell will be broken the day I can buy and sell it quickly and with a huge depth on the buy and sell side.

I agree with what you're saying but it's all baby steps right now.  Sure it's not as convenient as it needs to be to convert fiat to Bitcoin but that's why the infrastructure needs improving.  If you look back even a year ago you can see the improvements and the capital flowing in.  Things won't change overnight you just need to look at the overall trend and decide if it's going in the right direction.  Bitcoin right now is all about foresight, people need to get away from the "early adopter" or "missed the train" mindset, we're still very much in the infancy of Bitcoin's potential.