"Fair distribution"

[Ibian]

So this keeps coming up. Why do we want a more so-called fair distribution? How does the economy benefit from this? Let's leave the moral arguments and ethical outrage for another time, for this thread I would like to focus on the practical aspects.

[DSF]

Well, some make or mine cryptocoins for profit. Some use them as cryptocurrency is meant to be. As payment instrument.
gold diggers want centralized. Others want fair distribution and maximum decentralization.
Unfortunately majority of cryptocoins are held  by very small amount of people. Thats why they never get very popular.

[Peter R]

Like I've been saying, fair is the new 4-letter f-word.

The distribution of bitcoin is efficient, by definition.  The definition of fair is subjective, and in my opinion seems to usually mean "more distribution for me."  

The confusing thing is that increased adoption of bitcoin benefits all users from this day forward equally, whether you acquired your first coin in 2010 or 2014.  Yes, the best time to plant a tree was 30 years ago, but the second best time is today.  

But I think the fairness talk will be with us forever: people were clamouring about it last summer at $100 / BTC (it was unfair that the didn't learn about bitcoin in 2012 at 1/10th the price).  

[Dalmar]

People worry about this because some of those mega-whales (like Satoshi or the purported 650k Gox thief) can severely crash the market. When you buy bitcoin you not only put faith in the protocol but also on the rationality of mega-whales.

[cr1776]

People worry about this because some of those mega-whales (like Satoshi or the purported 650k Gox thief) can severely crash the market. When you buy bitcoin you not only put faith in the protocol but also on the rationality of mega-whales.

Even a huge dump of coins would only depress the price for a short period of time and would help increase the so-called "fair distribution" by enabling more people to buy more coins at a lower price. 

If you had someone dump 650k coins and the price hit $1, it would be snapped up in a very short period.  Plenty of people would say, "shoot, I'll put 1000 Euro in as a gamble."

[Peter R]

A lot of people think that if you were an "early adopter" who bought 10,000 coins for $300 in 2010, that you still have them.  

Knowing my luck, here's what would have happened to me if I had purchased 10,000 coin for $0.03 / BTC in 2010.  

1.  When bitcoin hit $0.50, I would have been pleased with my good fortune and sold half, giving me $2500

2.  When bitcoin hit $2.00, I would have been ecstatic and sold half of my remaining half, giving me $2500 + $5000 = $7500.

3.  When bitcoin continued to rally in 2011, I would have been upset with my earlier decisions and I would have become convinced that bitcoin was set to quickly become a new world currency.  I would not have sold any coins at $30.

4.  After months of falling prices, I would have shifted back to my original view that it was an interesting experiment that will probably fail and that since I was still "up" I should cash out completely.  I would have sold my remaining 2,500 BTC at perhaps $5, giving me $2500 + $5000 + $12,500 = $20,000.  

5.  I would consider the fact that I turned $300 into $20,000 a good investment and move on with other interests in my life.  

6.  Later I would hear about bitcoin hitting $100 then $1,000.  I would be re-incarnated as a venomous troll and haunt bitcointalk.org for the rest of my days.  [Actually, I'd probably just learn from the past and re-invest.  I'd still be up $20,000 right?  But I can see how being an early adopter could be quite painful to all those that sold most of their coins].  

7.  Perhaps it is better that I didn't learn about bitcoin until enough price history and community wisdom had emerged that I could participate in what I think is a reasonable manner.  

[Dalmar]

Even a huge dump of coins would only depress the price for a short period of time and would help increase the so-called "fair distribution" by enabling more people to buy more coins at a lower price. 

If you had someone dump 650k coins and the price hit $1, it would be snapped up in a very short period.  Plenty of people would say, "shoot, I'll put 1000 Euro in as a gamble."

It depends on the timing. When general confidence in bitcoin is low and a huge dump happens, it will take a very long time before it gets back to pre-dump levels - especially if the mega-whale decides to kill off any subsequent rallies with additional smack downs.

[Erdogan]

Fair always means: someone else pays.

[xt-lilac]

You can´t distribute it fair, there is always someone who will complain.

[odolvlobo]

People worry about this because some of those mega-whales (like Satoshi or the purported 650k Gox thief) can severely crash the market.

That's a non-issue. Bitcoin works well no matter what the exchange rate is.

[bitebits]

Let's pretend right know 'everybody' would have or even get the same amount of bitcoins, and all the bitcoins are mined.
What would happen? Some will instantly sell, while others will buy, some will hold, some will spend, and some will lose them.

So within months, there again is an uneven distribution. Which then in time will be considered 'unfair', because some would argue they needed the fiat, did not fully understand Bitcoin, got robbed, etc etc.

[odolvlobo]

People only consider the distribution unfair because Bitcoin has succeeded (so far).

Would the distribution still be considered unfair if Bitcoin collapsed? What would be said if bitcoin investors demanded a bailout? It certainly couldn't be said that they got what they deserved because that would imply that the distribution is fair.

[marcus_of_augustus]

People only consider the distribution unfair because Bitcoin has succeeded (so far).

Would the distribution still be considered unfair if Bitcoin collapsed? What would be said if bitcoin investors demanded a bailout? It certainly couldn't be said that they got what they deserved because that would imply that the distribution is fair.

Yes, this.

"Fair" is a subjective variable strongly dependent on price, price is also a subjective value variable.

TL;DR life, nor bitcoin, isn't fair.

[Peter R]

People only consider the distribution unfair because Bitcoin has succeeded (so far).

Would the distribution still be considered unfair if Bitcoin collapsed? What would be said if bitcoin investors demanded a bailout? It certainly couldn't be said that they got what they deserved because that would imply that the distribution is fair.

Yes, this.

Agree.  Great explanation odolvlobo. 

[billysweird]

 There is no central mainframe to shut down, and the intelligence in bitcoin is completely distributed with the single goal of obsoleting central banking.

[Dalmar]

That's a non-issue. Bitcoin works well no matter what the exchange rate is.

For over 90% of its users (ahem, speculators), the exchange rate is important. Most new users are also only attracted to it after price bubbles - significantly less join when bitcoin is declining.

[ShakyhandsBTCer]

Let's pretend right know 'everybody' would have or even get the same amount of bitcoins, and all the bitcoins are mined.
What would happen? Some will instantly sell, while others will buy, some will hold, some will spend, and some will lose them.

So within months, there again is an uneven distribution. Which then in time will be considered 'unfair', because some would argue they needed the fiat, did not fully understand Bitcoin, got robbed, etc etc.

What you are suggesting would be "fair" is similar to socialism (everyone getting the same number of bitcoin).

To see how this would not work see The tragedy of the commons (this is not a play)

http://en.wikipedia.org/wiki/Tragedy_of_the_commons

EDIT: nor is it shakespeare

[Erdogan]

Let's pretend right know 'everybody' would have or even get the same amount of bitcoins, and all the bitcoins are mined.
What would happen? Some will instantly sell, while others will buy, some will hold, some will spend, and some will lose them.

So within months, there again is an uneven distribution. Which then in time will be considered 'unfair', because some would argue they needed the fiat, did not fully understand Bitcoin, got robbed, etc etc.

What you are suggesting would be "fair" is similar to socialism (everyone getting the same number of bitcoin).

To see how this would not work see The tragedy of the commons (this is not a play)

http://en.wikipedia.org/wiki/Tragedy_of_the_commons

EDIT: nor is it shakespeare

And for a practical example, playing out in the world theater as we speak, for everyone who wants to see, look at Venezuela.

[waldox]

i welcome a temp dip in price
$1 bitcoins plux

[ShakyhandsBTCer]

Let's pretend right know 'everybody' would have or even get the same amount of bitcoins, and all the bitcoins are mined.
What would happen? Some will instantly sell, while others will buy, some will hold, some will spend, and some will lose them.

So within months, there again is an uneven distribution. Which then in time will be considered 'unfair', because some would argue they needed the fiat, did not fully understand Bitcoin, got robbed, etc etc.

What you are suggesting would be "fair" is similar to socialism (everyone getting the same number of bitcoin).

To see how this would not work see The tragedy of the commons (this is not a play)

http://en.wikipedia.org/wiki/Tragedy_of_the_commons

EDIT: nor is it shakespeare

And for a practical example, playing out in the world theater as we speak, for everyone who wants to see, look at Venezuela.

Look at the United States. Look at how many people have enrolled in so many social programs since Obama took office.