A _new_ currency has to be fair

[ssaCEO]

From the perspective of someone who doesn't have a lot of money, Capitalism isn't fair. Capitalism awards speculators, and their ne'er-do-well children, and their mistresses and sycophants and shills and hangers-on. It keeps hard-working people locked in debt, sometimes to people who don't have to work at all.

Now on the other hand, from the perspective of someone with a lot of money, awards people who think outside the box; who take risks; and it gives their progeny special advantages. To someone who haS a lot of money, it's eminently fair.

Moreover, to middle-class Americans who think that someday they might have a lot of money (writ the "American Dream"), it's also fair.

Deep down, I agree with evoorhees. It's fair, albeit in a cold and evolutionary way. But I can see both sides of the argument, including as it pertains to Bitcoin.

I guess the thing that's worth remembering is that fairness is a meaningless term when it's thrown around by parties who have something to gain or lose. In the casino industry, fairness has a specific definition: Does the customer know what they're getting? Are the rules as written the same as the rules in play? If so, it's fair. Those rules might be completely skewed toward the house, but as long as all the parties are playing by the same rules, and those rules are out there for everyone to see, then that's fair.

So don't be a cheap winner, and don't be a sore loser. Any set of rules is fair as long as the participants all tacitly agree to them.

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[ThomasV]

I bring it up because I don’t like the way people think it’s perfect [...]

Bitcoin is a currency. It is not a wealth redistribution system. Therefore, it does not have to be perfect, nor even good, at allocating wealth.
Unlike many people on this forum, I do believe in wealth redistribution. However, this should be achieved by governments and taxes, not by the way a currency is allocated.

[westkybitcoins]

• 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?

*looks up sigmoid curve*

Ah, I've seen this one before. I suppose that might have worked. Although in defense of the designer(s) (note: I'm not an early adopter) I would think smoothly integrating a sigmoid curve instead of the current one would have been more difficult, and possibly not even considered necessary.

(Anyone want to take a crack at it? With difficulty adjustments every 2016 blocks, what should the miner block payouts be to achieve this curve? Presume payout adjustments every year rather than every 4 years. A free bitcoin to the first illustrated viable response!)

In any case, I don't think it matters that much. As bitcoins become more ubiquitous, fewer people will know or care about who jumped in early, and how well they've done.

[Harvey]

I bring it up because I don’t like the way people think it’s perfect [...]

Bitcoin is a currency. It is not a wealth redistribution system. Therefore, it does not have to be perfect, nor even good, at allocating wealth.
Unlike many people on this forum, I do believe in wealth redistribution. However, this should be achieved by governments and taxes, not by the way a currency is allocated.

It's a non-concept. There is no wealth "redistribution". Wealth is infinite through technology and innovation. If you want riches, go stake your share through your own choices and actions. Don't just sit their begging for a share from the others.

I hate the left more and more with every passing day I see this bullshit.

[Harvey]

From the perspective of someone who doesn't have a lot of money, Capitalism isn't fair. Capitalism awards speculators, and their ne'er-do-well children, and their mistresses and sycophants and shills and hangers-on. It keeps hard-working people locked in debt, sometimes to people who don't have to work at all.

Now on the other hand, from the perspective of someone with a lot of money, awards people who think outside the box; who take risks; and it gives their progeny special advantages. To someone who haS a lot of money, it's eminently fair.

Moreover, to middle-class Americans who think that someday they might have a lot of money (writ the "American Dream"), it's also fair.

Deep down, I agree with evoorhees. It's fair, albeit in a cold and evolutionary way. But I can see both sides of the argument, including as it pertains to Bitcoin.

I guess the thing that's worth remembering is that fairness is a meaningless term when it's thrown around by parties who have something to gain or lose. In the casino industry, fairness has a specific definition: Does the customer know what they're getting? Are the rules as written the same as the rules in play? If so, it's fair. Those rules might be completely skewed toward the house, but as long as all the parties are playing by the same rules, and those rules are out there for everyone to see, then that's fair.

So don't be a cheap winner, and don't be a sore loser. Any set of rules is fair as long as the participants all tacitly agree to them.

There are no losers in this game unlike your literal zero-sum casino games. There are people that succeeded and there are those that did nothing. There was no real loss. It's just butthurt envy all around.

[elggawf]

I approach this "problem" from the opposite end. You're right: it's not fair, it's not optimal.

But how would you do it? How do you dole out a new currency to people in a fair manner, but also in a decentralized way that's not subject to gaming or influence by any third party?

That, I think, is the key to understanding Bitcoin's idiocy. Things about it's design that seem stupid? They're not that way because it seemed like a good idea to some coked-out libertarian (as much as other coked-out libertarians will insist otherwise), it's that way because there's simply no better way of doing it.

[N12]

I bring it up because I don’t like the way people think it’s perfect [...]

Bitcoin is a currency. It is not a wealth redistribution system. Therefore, it does not have to be perfect, nor even good, at allocating wealth.

It’s not about redistribution, it’s about creating a basis that is not absolutely fucked up. Our basis is fucked up because the difficulty was 1 for a whole year, and the price was also very low, but then the user base exploded and the money supply couldn’t react, so humans had to – and we’ve seen how good humans are at that.

In any case, I don't think it matters that much. As bitcoins become more ubiquitous, fewer people will know or care about who jumped in early, and how well they've done.

I don’t think you understand, my point is that the market is struggling with this initial allocation and trying to spread it out, but in doing so lowering its usefulness. (you can’t tell me that the huge volatility we have seen and are seeing is NOT largely due to this, and NOT reducing Bitcoin’s value overall)

My theory with the sigmoid curve is that naturally, as the reward/block grows over time, the incentive to adopt Bitcoin actually grows, and the growth of the community will adapt to it. It simply spreads out more Bitcoins to later people (this is exactly what the market has done the past 6 months!) while still maintaining its basic properties, as "peak bitcoin" would eventually be hit.

BTW, it’s unfortunate I can read Atlas’ bullshit while answering, even though I have him on ignore. I wish he would stop making a new account every day.

[ThomasV]

I don’t think you understand, my point is that the market is struggling with this initial allocation and trying to spread it out, but in doing so lowering its usefulness. (you can’t tell me that the huge volatility we have seen and are seeing is NOT largely due to this, and NOT reducing Bitcoin’s value overall)

I agree, but there are other reasons to volatility. I expect volatility to be reduced in the future

My theory with the sigmoid curve is that naturally, as the reward/block grows over time, the incentive to adopt Bitcoin actually grows, and the growth of the community will adapt to it. It simply spreads out more Bitcoins to later people (this is exactly what the market has done the past 6 months!) while still maintaining its basic properties, as "peak bitcoin" would eventually be hit.

There is no way you could have matched the time constants of your sigmoid with future adoption rate.
For example, the june spike was very sudden; it was completely impossible to predict when such an event, caused by mediatisation, would occur.

[Yankee (BitInstant)]

Capitalism is fair.

No...its not.

Individuals are only free on the condition that the great mass of people taken collectively- are not. We could not have capitalism without a working class and they are not free within the capitalist system to cease being wage laborers. A people's capitalism is nonsense.

[bitcoinbear]

I bring it up because I don’t like the way people think it’s perfect [...]

Bitcoin is a currency. It is not a wealth redistribution system. Therefore, it does not have to be perfect, nor even good, at allocating wealth.
Unlike many people on this forum, I do believe in wealth redistribution. However, this should be achieved by governments and taxes, not by the way a currency is allocated.

It's a non-concept. There is no wealth "redistribution". Wealth is infinite through technology and innovation. If you want riches, go stake your share through your own choices and actions. Don't just sit their begging for a share from the others.

I hate the left more and more with every passing day I see this bullshit.

I think you could better describe this as "resource access redistribution". Since resources are scarce, we can't all have access to them. Essentially wealth is just a measure of access to resources. Is it fair that some people have access to more resources than others? No, but life's not fair.

We should give our resources (wealth) to help others, and we should encourage others to give as well, but I do not think anybody should be forced to give up their wealth.

[Harvey]

Capitalism is fair.

No...its not.

Individuals are only free on the condition that the great mass of people taken collectively- are not. We could not have capitalism without a working class and they are not free within the capitalist system to cease being wage laborers. A people's capitalism is nonsense.

Wage laborers are only victims because your "collective" that I call the state artificially raises the cost-of-living. People can live on $60 a month in other countries for a reason and it's because the state doesn't make everything overpriced.

[N12]

Capitalism is fair.

No...its not.

Individuals are only free on the condition that the great mass of people taken collectively- are not. We could not have capitalism without a working class and they are not free within the capitalist system to cease being wage laborers. A people's capitalism is nonsense.

Wage laborers are only victims because your "collective" that I call the state artificially raises the cost-of-living. People can live on $60 a month in other countries for a reason and it's because the state doesn't make everything overpriced.

GTFO TO YOUR PLAYGROUND @ Politics & Society. I DON’T CARE ABOUT YOUR LOLBERTARIAN RAMBLINGS AND PHILOSOPHY ABOUT EVERYTHING. I WOULD LIKE TO DISCUSS THE FAIRNESS OF BITCOIN.

THANK YOU

[Harvey]

I bring it up because I don’t like the way people think it’s perfect [...]

Bitcoin is a currency. It is not a wealth redistribution system. Therefore, it does not have to be perfect, nor even good, at allocating wealth.
Unlike many people on this forum, I do believe in wealth redistribution. However, this should be achieved by governments and taxes, not by the way a currency is allocated.

It's a non-concept. There is no wealth "redistribution". Wealth is infinite through technology and innovation. If you want riches, go stake your share through your own choices and actions. Don't just sit their begging for a share from the others.

I hate the left more and more with every passing day I see this bullshit.

I think you could better describe this as "resource access redistribution". Since resources are scarce, we can't all have access to them. Essentially wealth is just a measure of access to resources. Is it fair that some people have access to more resources than others? No, but life's not fair.

We should give our resources (wealth) to help others, and we should encourage others to give as well, but I do not think anybody should be forced to give up their wealth.

Resources are scarce on a tangible level but we can use them more efficiently. Innovations that allow us to get by on less resources create wealth. This can be done indefinitely. It's not hurting anyone if somebody has more resources than another. An individual can get by on very little resources by using them efficiently.

We should not sacrifice, we should not commit suicide in the name of a "collective". We should share with others because we choose to value them and not by force.

[Harvey]

Capitalism is fair.

No...its not.

Individuals are only free on the condition that the great mass of people taken collectively- are not. We could not have capitalism without a working class and they are not free within the capitalist system to cease being wage laborers. A people's capitalism is nonsense.

Wage laborers are only victims because your "collective" that I call the state artificially raises the cost-of-living. People can live on $60 a month in other countries for a reason and it's because the state doesn't make everything overpriced.

GTFO TO YOUR PLAYGROUND @ Politics & Society. I DON’T CARE ABOUT YOUR LOLBERTARIAN RAMBLINGS AND PHILOSOPHY ABOUT EVERYTHING. I WOULD LIKE TO DISCUSS THE FAIRNESS OF BITCOIN.

THANK YOU

Ah but it's relevant, Blitzboom.

[Yankee (BitInstant)]

Capitalism is fair.

No...its not.

Individuals are only free on the condition that the great mass of people taken collectively- are not. We could not have capitalism without a working class and they are not free within the capitalist system to cease being wage laborers. A people's capitalism is nonsense.

Wage laborers are only victims because your "collective" that I call the state artificially raises the cost-of-living. People can live on $60 a month in other countries for a reason and it's because the state doesn't make everything overpriced.

True, be that as it may, my statement is still true.

The state may not be the collective, but the state does control it, so what you said makes sense. However, it does not negate my statement.

Just because what you said is true, it actually further helps my point. You cannot have capitalism without someone losing out and thats precisely why Im a capitalist!

[westkybitcoins]

In any case, I don't think it matters that much. As bitcoins become more ubiquitous, fewer people will know or care about who jumped in early, and how well they've done.

I don’t think you understand, my point is that the market is struggling with this initial allocation and trying to spread it out, but in doing so lowering its usefulness. (you can’t tell me that the huge volatility we have seen and are seeing is NOT largely due to this, and NOT reducing Bitcoin’s value overall)

I think there are two big issues causing more problems than the supply curve: the learning curve for bitcoin, and the fact people can't get or dump bitcoins on a whim. Having to go through the exchanges (I know it's not mandatory, just one of the easiest ways) is quite a bottleneck.

My theory with the sigmoid curve is that naturally, as the reward/block grows over time, the incentive to adopt Bitcoin actually grows, and the growth of the community will adapt to it. It simply spreads out more Bitcoins to later people (this is exactly what the market has done the past 6 months!) while still maintaining its basic properties, as "peak bitcoin" would eventually be hit.

I see where you're coming from, but I do see one distinct advantage with the current growth curve: coins pour in at a high rate right from the start, for quite a while. We still haven't hit the first block payout reduction, so we still, 2 years from startup, have access to the 50 coins/block. True, it's harder, but that's more a function of so many miners jumping in.

With a sigmoid curve, sure, early adopters would have fewer coins... but we'd also probably still be having trouble getting bitcoins due to lower payouts, and would be waiting for the uptick for the coins to pour in.

So, I guess I can see it working (and having issues) either way.

[714]

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?

Intractable past circumstances are evidence of failure in the original implementation, which nonetheless remains unchanged. Bad ideas that can't be fixed get replaced. If you think there's any value in Bitcoin you should hope it can change and adapt, otherwise it's just Flooze 2.0 implemented by parties who weren't quite as naïve as the implementors of Flooze 1.0.

It's not clear to me that there's a shared definition of fairness in this discussion. It's hard to decide if it's even relevant if it is undefined. Statements like "capitalism is fair" are good for their humor content, the same thing was once said every bit as earnestly about witch trials by ordeal. What's the weather like in the 17th century?

[evoorhees]

You cannot have capitalism without someone losing out and thats precisely why Im a capitalist!

 

A man trades his candy bar for some money. Another man trades his money for the candy bar.

Who lost out?

[Yankee (BitInstant)]

You cannot have capitalism without someone losing out and thats precisely why Im a capitalist!

 

A man trades his candy bar for some money. Another man trades his money for the candy bar.

Who lost out?

lol I guess using the simplest of transactions.
 
Using your example with the candy bar, allow to make another point. Not all the time does one actually know he's losing out, furthermore don't think of it as losing out but instead 1 of them got the better hand.

So, using your example there are alot of factors we dont know.
How much did the original owner pay for the candy bar?
Was it the same price he sold it for?
What did he value the candy bar at? Did its capitalistic value go up or down?

No matter how the questions are answered, someone had to of gotten the better deal.

[Harvey]

You cannot have capitalism without someone losing out and thats precisely why Im a capitalist!

 

A man trades his candy bar for some money. Another man trades his money for the candy bar.

Who lost out?

lol I guess using the simplest of transactions.
 
Using your example with the candy bar, allow to make another point. Not all the time does one actually know he's losing out, furthermore don't think of it as losing out but instead 1 of them got the better hand.

So, using your example there are alot of factors we dont know.
How much did the original owner pay for the candy bar?
Was it the same price he sold it for?
What did he value the candy bar at? Did its capitalistic value go up or down?

No matter how the questions are answered, someone had to of gotten the better deal.

They both got the better deal. They wouldn't of entered the transaction if either one of them had to sacrifice. Both profited. Wealth was created.

One valued the candy bar more than the money. Another valued the money more than candy bar.

Wins all around.