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Author Topic: A _new_ currency has to be fair  (Read 6003 times)
ElectricMucus
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December 11, 2011, 05:53:45 PM
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I hear the following statement alot: Bitcoin is pure capitalism, it isn't supposed to be fair.

People who acquired alot of Bitcoins without much effort are supposed to deserve it because they got in early / had alot of spare fiat or generated them before the public knew about it.
I do not have this opinion for the following reason:

Bitcoin wasn't a currency until the first products and services were offered for it. Also it is supposed to be a chicken and the egg problem which I think it is not: You can start a working economy 0-second, once you gathered enough people willing to participate.


This is the main reason why I still doubt bitcoins success (or think it is likely to fail once there is an alternative to it)
And, quite frankly if some people would adopt my suggestion in practice bitcoins intended purpose would be obsolete, and it's current state of existence a sophisticated gambling system would loose it's merit once people realize rapid economic growth is indeed possible.

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December 11, 2011, 06:04:09 PM
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Capitalism is fair.
ElectricMucus
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December 11, 2011, 06:06:11 PM
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Capitalism is fair.
But being able to obtain a "free" voucher as part of a future economy without participation isn't.

If so bitcoin isn't pure capitalism and my argument stands.

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December 11, 2011, 06:08:08 PM
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Then buy bitcoins NOW, before their price skyrocket at 500$ and you all are "the early adopters bought them at 3$!!! Not fair!"

If price drop... well then that mean the currency is more or less dying, cause it's market cap will decrease.

So the "fair" argument only apply if price will increase. If you bring that argument you are implying price will increase then why you aren't buying like mad NOW?
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December 11, 2011, 06:12:41 PM
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You're more than welcome to start your own digital currency.
ElectricMucus
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December 11, 2011, 06:13:39 PM
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Then buy bitcoins NOW, before their price skyrocket at 500$ and you all are "the early adopters bought them at 3$!!! Not fair!"

If price drop... well then that mean the currency is more or less dying, cause it's market cap will decrease.

So the "fair" argument only apply if price will increase. If you bring that argument you are implying price will increase then why you aren't buying like mad NOW?

I do not care about that, same, dumb argument. And quite frankly the public tends to agree, we are far from critical mass and I don't think we will reach it with that attitude. I am not complaining about getting a too small part of the pie, though I considered participating in the economy, but as it turns out, leveraged speculation is more rewarding than actual work.


You're more than welcome to start your own digital currency.

Good idea.

You tell me: Bitcoin isn't fair suck it.
If I find the right people I will come back and tell you: Our system is better, too bad nobody wants bitcoins, suck it.

Goodbye.

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December 11, 2011, 06:15:09 PM
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Quote
I don't think we will reach it with that attitude.
Then the problem doesn't exist.
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December 11, 2011, 06:30:17 PM
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This is the main reason why I still doubt bitcoins success (or think it is likely to fail once there is an alternative to it)

And, quite frankly if some people would adopt my suggestion in practice bitcoins intended purpose would be obsolete, and it's current state of existence a sophisticated gambling system would loose it's merit once people realize rapid economic growth is indeed possible.

sounds like wishful thinking...
you doubt it will succeed because you want it to fail?

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December 11, 2011, 06:31:29 PM
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I hear the following statement alot: Bitcoin is pure capitalism, it isn't supposed to be fair.

People who acquired alot of Bitcoins without much effort are supposed to deserve it because they got in early / had alot of spare fiat or generated them before the public knew about it.
I do not have this opinion for the following reason:

Bitcoin wasn't a currency until the first products and services were offered for it. Also it is supposed to be a chicken and the egg problem which I think it is not: You can start a working economy 0-second, once you gathered enough people willing to participate.


This is the main reason why I still doubt bitcoins success (or think it is likely to fail once there is an alternative to it)
And, quite frankly if some people would adopt my suggestion in practice bitcoins intended purpose would be obsolete, and it's current state of existence a sophisticated gambling system would loose it's merit once people realize rapid economic growth is indeed possible.

I'm not understanding your argument.  (nor what 'adopt my suggestion' refers to above).
Can you restate it somewhat?

You seem to be saying that a large number of participants who agree to use it is the primary requirement and that this is a relatively easy hurdle(?)
Are you saying the lack of 'fairness' (whether real or just perceived) is going to be a showstopper to widespread adoption, and so a new currency with the attribute of apparent fairness will rapidly overtake it?

It's not obvious to me that a cryptocurrency with more fairness is ever likely to arise.
I recognise that in effect, massive adoption of bitcoin would result in a wealth transfer from the existing global economy to a large number of individuals who didn't contribute a comparable amount of economic activity in return.. but It's also not clear to me that this wealth transfer is anything more than a blip in the scheme of things considering the scale of the global economy.
People win lotteries, both win and lose big-time in gambling, and inherit massive amounts all the time. Those 'unfair' wealth transfers don't seem to be a major issue.. so what is the beef with bitcoin 'unfairness' anyway?  

It's a psychological barrier to mass uptake?  I hardly think so, as people will be acting to maximize their own returns more than worrying about whether someone else got a windfall surely.
I've probably completely misunderstood your argument though - hence my appeal for clarification.









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December 11, 2011, 06:34:42 PM
 #10

(to OP) You seem to assume that early adopters are still in possession of large amounts of Bitcoins.
What evidence do you have that it is still the case?
Multiple times, exchanges experienced crashes as some people were dumping large quantities of Bitcoins.
Many Bitcoins changed hand during the downward trend that led the price from $30 to $2.
I wouldn't be surprised if many early adopters already liquidated a big part of their holdings.

On the other hand, at current exchange rate, I would expect that people with a reasonnable wealth in fiat currency purchased bitcoins in thousands.
Are these people any more legitimate than early adopters?
Is being wealthy in fiat currency a more noble criterion than being an early adopter?
Are you aware that at current price level, any venture capitalist could pretty much buy the whole Bitcoin economy in a whimp?

Early adopters had the courage to invest time, effort and resources in Bitcoin when it was worth nothing and did not have any clear projection.
Now, people who have the courage to sink a part of their savings to add Bitcoin to their porfolio can still become decently wealthy in Bitcoins at a quite low price in regard of the potential.

Of course, people who do not want to take any risk will never act, and will be left behind.
These are the ones who will complain bitterly that Bitcoin is unfair. But that's alright.
If a fair system is a system that rewards equally people who take risks, and people who don't, then I don't want a fair system.
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December 11, 2011, 06:35:38 PM
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In other news, people who bought shares during Google's IPO don't deserve to profit from it, because they didn't participate in making Google's products.

If that was not a big enough hint: There are more ways to participate in an economy than to provide labor. People who buy bitcoins increase the total worth of all bitcoins, thus the incentive of merchants to accept Bitcoin, thus help grow the Bitcoin economy. If this growth results in the success of Bitcoin and a corresponding price appreciation, those who took a risk by investing in bitcoins have every right to profit from it.

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December 11, 2011, 06:48:47 PM
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In other news, people who bought shares during Google's IPO don't deserve to profit from it, because they didn't participate in making Google's products.

If that was not a big enough hint: There are more ways to participate in an economy than to provide labor. People who buy bitcoins increase the total worth of all bitcoins, thus the incentive of merchants to accept Bitcoin, thus help grow the Bitcoin economy. If this growth results in the success of Bitcoin and a corresponding price appreciation, those who took a risk by investing in bitcoins have every right to profit from it.

Ding ding ding!  +1
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December 11, 2011, 06:53:50 PM
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In other news, people who bought shares during Google's IPO don't deserve to profit from it, because they didn't participate in making Google's products.

If that was not a big enough hint: There are more ways to participate in an economy than to provide labor. People who buy bitcoins increase the total worth of all bitcoins, thus the incentive of merchants to accept Bitcoin, thus help grow the Bitcoin economy. If this growth results in the success of Bitcoin and a corresponding price appreciation, those who took a risk by investing in bitcoins have every right to profit from it.

Ding ding ding!  +1

I'd call that match, set, and game. And I'm just going to leave this here for the early adopter pyramid ponzi scheme unfair crowd to read.  One of many examples of early adopter successes not being called a ponzi pyramid unfair scam.

http://www.reuters.com/article/2011/12/08/us-facebook-millionaires-idUSTRE7B72NK20111208

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December 11, 2011, 06:55:51 PM
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  • This is no problem. Initial distribution has been proven irrelevant on large time-scales. An early adopter can only spend his coins once, then the problem is done with.
  • An alternative that tries to "solve" this "issue" of speculation profits defeats the purpose of the scarcity concept, rendering the new currency unstable and therefore unreliable.

Bitcoin is correct in this regard. The idea of changing this aspect is plain wrong. Envy against early adopters just isn't a very useful notion, the alternatives have greater, prevailing flaws.

I also missed a great chance when I didn't check out Bitcoin the first time I heard of it, I'd probably be rich now if I had. But this is an emotional thing that should not blur our vision of the future.

Bitcoin did it right. Don't get all emotional over a few people who got free coins in the beginning, it's a tiny problem compared with the ones Bitcoin solves. Altering the rules to prefer equality over fairness would destroy the very heart of Bitcoin, the part which makes it better than classical currencies.
evoorhees
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Democracy is the original 51% attack


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December 11, 2011, 06:57:49 PM
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Bitcoin did it right. Don't get all emotional over a few people who got free coins in the beginning, it's a tiny problem compared with the ones Bitcoin solves. Altering the rules to prefer equality over fairness would destroy the very heart of Bitcoin, the part which makes it better than classical currencies.

Well said, lots of smart comments today!
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December 11, 2011, 07:23:37 PM
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Bitcoin did it right. Don't get all emotional over a few people who got free coins in the beginning, it's a tiny problem compared with the ones Bitcoin solves. Altering the rules to prefer equality over fairness would destroy the very heart of Bitcoin, the part which makes it better than classical currencies.

Well said, lots of smart comments today!

yep indeed, ppl are getting used to this kind of threads and they come up with answers in a more organized way.
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December 11, 2011, 07:45:54 PM
 #17

In other news, people who bought shares during Google's IPO don't deserve to profit from it, because they didn't participate in making Google's products.

If that was not a big enough hint: There are more ways to participate in an economy than to provide labor. People who buy bitcoins increase the total worth of all bitcoins, thus the incentive of merchants to accept Bitcoin, thus help grow the Bitcoin economy. If this growth results in the success of Bitcoin and a corresponding price appreciation, those who took a risk by investing in bitcoins have every right to profit from it.
/thread
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December 11, 2011, 07:55:40 PM
 #18

  • An alternative that tries to "solve" this "issue" of speculation profits defeats the purpose of the scarcity concept, rendering the new currency unstable and therefore unreliable.
I know an alternative that wouldn’t have done so. It’s called a sigmoid curve and it happens with all extractions of resources, except for Bitcoin which was designed completely inelastic in a 4 year period, so that the gold miner Satoshi, who didn’t even own a pickaxe (CPU mining) in the beginning, could just carry home 1% or 10% of the total money supply.

I do think it would have been justified to use the assumption that surely, at the beginning there will be LESS adopters than later on, and I do think it would have spared us a lot of headaches because we would have seen LESS of a misallocation which the market had to weed out (and maybe still is), and by doing so, actually decreasing trust and usefulness (volatility etc.) of Bitcoin over a longer time period.

Can anyone explain why the Bitcoin mines should produce the same amount of Bitcoins on day #1 where 3 guys on a cryptography mailing list know about it, as on day #1000 where tens of thousands do?
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December 11, 2011, 08:12:46 PM
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I know an alternative that wouldn’t have done so. It’s called a sigmoid curve ...

fair enough. indeed, Bitcoin could have been allocated differently.
but you do understand that the past is history, and that we are not going to change it, don't you?

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December 11, 2011, 08:28:09 PM
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I know an alternative that wouldn’t have done so. It’s called a sigmoid curve ...

fair enough. indeed, Bitcoin could have been allocated differently.
but you do understand that the past is history, and that we are not going to change it, don't you?

No, and I’ve said so before, that would undermine the whole system, obviously. I don’t think we will ever have a chance besides with this block chain. It’s funny because it’s almost extortion when you think about it.

I think noone has discussed a sigmoid curve in 2009 or 2010. The people back then either knew their role in the system and didn’t want to decrease their individual piece of the cake (yay rational actors), or they just didn’t foresee possible "problems" the initial allocation might bring.

I bring it up because I don’t like the way people think it’s perfect, and I think it might be good to reflect and learn what could have made Bitcoin more robust, so that the market doesn’t have to go from 32 to 1.99 to (as I think, eventually) surpassing the former high.

As I’ve said the additional volatility it brought is actually decreasing usability and trust. I guess the only advantage this brings is that it attracts a whole lot of speculators who are now correcting what has gone "wrong" with the monetary policy. Maybe this leads to growth that exceeds the damage, but I doubt it.
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