Bitcoin - Increasing the rich and poor divide?

[InwardContour]

It is my understanding that bitcoin was not designed to solve the wealth distribution problem. It is designed to take governments and banks out of the monetary system. So with bitcoin, you would still have a "rich and poor division", just no one can move your bitcoin except you.
(Providing you are the sole owner of your keys)

This division is worse with bitcoin then it is with other measures of wealth. A very small percentage of bitcoin users hold a large percentage of the total bitcoin in circulation. This makes the price very sensitive to sales by these large holders.

Bitcoin is a currency, not a welfare system.

It is also a free market, those who are wealthy (in fiat) are free to buy as many bitcoin as they wish. You cannot forbid anyone from buying bitcoin just because they are wealthy, nor should bitcoin be free to those who are poor. (You can donate to them if you want to)

The fact that wealthy people own bitcoin is not the point. The point is that there are a few large holders of bitcoin who could potentially disrupt the BTC/USD (among others) market as they hold such a large percentage of bitcoin.

[jonald_fyookball]

It is my understanding that bitcoin was not designed to solve the wealth distribution problem. It is designed to take governments and banks out of the monetary system. So with bitcoin, you would still have a "rich and poor division", just no one can move your bitcoin except you.
(Providing you are the sole owner of your keys)

This division is worse with bitcoin then it is with other measures of wealth. A very small percentage of bitcoin users hold a large percentage of the total bitcoin in circulation. This makes the price very sensitive to sales by these large holders.

Bitcoin is a currency, not a welfare system.

It is also a free market, those who are wealthy (in fiat) are free to buy as many bitcoin as they wish. You cannot forbid anyone from buying bitcoin just because they are wealthy, nor should bitcoin be free to those who are poor. (You can donate to them if you want to)

The fact that wealthy people own bitcoin is not the point. The point is that there are a few large holders of bitcoin who could potentially disrupt the BTC/USD (among others) market as they hold such a large percentage of bitcoin.

well that wasn't the OP point, but ok let's deal with your concern.

How could they disrupt the market?  By selling a lot?  Price will drop
and more people will get cheap coins, while the big seller's stash
will shrink.  What's the issue?

[odolvlobo]

First Question
I've read somewhere that only 1000 individuals own nearly 50% of all the Bitcoins currently in circulation. This gives me some concern.

The amount of wealth held in bitcoins is insignificant compared to the wealth held by the wealthiest people in the world. It will always be that way. Bitcoin will not change that no matter equitable the distribution of bitcoins might be.

[Musent]

This can happen with anything and any currency.

[littlewizard]

It is the same with real world, 90% of total capital is controlled by 10%. Bitcoin diversify this trend by creating some rich people who are previously poor.

[sed]

I think there's also a real possibility that bitcoin "takes off" and becomes very useful for many people in many everyday tasks but that fiat money also still exists alongside it for other tasks.  I think a lot of folks imagine that if bitcoin hits its true potential, it will be the only money in the world.  But I envision it mainly as a way to do secure electronic transactions, I think there will still be cases where it's less annoying and more productive to simply carry around a physical fiat money token (cash) and do transactions that way.

I guess in this way I'm a little like the other folks who said, well bitcoin isn't necessarily about fixing the rich/poor divide, its mission is orthogonal to that issue.

[keithers]

...
Say for e.g there is roughly 10 trillion dollars in circulation worldwide today, would that not mean that people like the Winklevoss Twins (who have nearly 1% of all bitcoins) would be valued at USD 100 Billion. Is this not mad? Is this not what bitcoin was fighting?
...

Bitcoin is/was fighting Gov't control over the money supply and their ability to create almost unlimited monetary inflation.
It is unfortunate that the early distribution of BTC was so concentrated in a few hands, but back then almost no one was paying attention or thinking they had much value.

BTC will still be viable as a currency, and a New World Order will be born.  

Ironic that you mention the New World Order since they have been talking about a universal currency for years

[wordman267645]

I think bitcoin will be remove middle class from the world..there's only remain rich's and poor's..

[Mightycoin]

Burn/destroy all money from this world and introduce new currency each person with an equal share, you will still find rich and poor in the society. So I don't blame BTC for anything.

[TaunSew]

http://bitcoinrichlist.com/top100

Less than 1000.  Top 100 addresses, and addresses =/= people, own 20%.   It's a common security precaution to break up your funds into multiple cold addresses / wallets.  So that top 100 may be anywhere from 1-99 persons (more likely in the lower half of the range).

[giveBTCpls]

It is my understanding that bitcoin was not designed to solve the wealth distribution problem. It is designed to take governments and banks out of the monetary system. So with bitcoin, you would still have a "rich and poor division", just no one can move your bitcoin except you.
(Providing you are the sole owner of your keys)

This division is worse with bitcoin then it is with other measures of wealth. A very small percentage of bitcoin users hold a large percentage of the total bitcoin in circulation. This makes the price very sensitive to sales by these large holders.

FIAT poor people are poor due to lack of education and lack of desire to work. thus they dont improve their life to get better jobs.. (no aspirations)..

with bitcoins, the bitcoin protocol does not care about your family history, it does not check your resume/CV for experience of which school you went to, bitcoin is not choosy.. AT ALL

bitcoin is open to anyone to improve their lives. if they aspire to do so..

all of these basement dwelling cry babies, that want free money without lifting a finger, will always cry that other people have more than them. they will always cry,, i repeat, always

dont blame bitcoin, blame yourselves, dont blame greed blame yourslves. everyone is greedy in one way or another but unless you do something about it, you will still be crying next year.

do not blame it on mining power.. i have loads of bitcoins and i probably only mined 1% or less of my hoard. i got mine from legitimate work and trade. so dont think the only way to get bitcoins is from mining. mining is a suckers game, instead learn to trade, learn to be a retailer, a sole trader, a contractor, the world is your oyster and you dont really need a resume/CV to start working..

so basement dwellers, go forth and prosper or sit there making excuses.. if you reply with excuses then you wont prosper.. your just wasting your own time sitting there thinking up reasons why you CANT work, rather then finding something you CAN do

They cant blame themselves, there is no free will and if they are lazy it's just a combination of genetics and environmental factors that lead them to be that way. Henceforth, no one is to blame for anything, free will is an ilusion and you are just discovering how your life is, that's it. Deal with it.


BTC is great, yes, but it does not solve inequality, that's a much deeper issue. You don't solve this with a new currency.

Also lol at everyone saying mining it's a suckers game and all that. If there wasn't miners, your precious Bitcoins would be rendered useless.

[giveBTCpls]

FIAT poor people are poor due to lack of education and lack of desire to work. thus they dont improve their life to get better jobs.. (no aspirations)..

this is the most hilarious i heard of poor people, looks like you never seen the world outside your neighborhood,

you really have no respect for lots of people that are forced in certain poor situations, even nowadays.. even in western countries.. you know the world is not made only of spoiled middle class kids (the only one that fit your description)


anyway.. i believe the only way to achieve global and common wealth is to remove any currency, bitcoin included. there would not be anymore rich and poor but a collaborative world based on other kind of units/scales. i see in bitcoin a step forward that direction.

Thats more like it, but society is not ready for such a revolution. We need thousands of years of evolution so the brain goes past the ape-like state we are still in.

[Lauda]

POS is doing that not Bitcoin, luckily Bitcoin is POW.
It's true some people go into the action early and go a lot of coins, but you can't blame Bitcoin and you can't blame them. You can only blame yourself, there were a lot of people who just skipped bitcoin and thought that it was worthless.
There is still time to buy in a lot of them and be rich if you wanted to be just that.

[DDuckworth]

While there still will be problems, many will be lessened - especially the federal reserve problem.

The federal reserve or "the fed" for short, is a NON GOVERNMENT ENTITY again, NON GOVERNMENT ENTITY. That was created in order to sound like a government entity.  When in reality, it is a network of bankers, who create money for the government, and since initially the government doesn't have money to pay for the created money - they give the government a loan with interest at the most basic level.  Now if you take someone who has 0 money and give them 5 bucks and say they'll owe you 6 bucks, however the total amount of money IN THE WORLD is 5 bucks, how could they ever possibly repay you?

Simple, they can't, and so inflation occurs and gets worse and worse to where the small amount of money the poor have becomes so worthless that they can't even feed themselves - and there you have a depression. It's not about the rich and the poor, it's about the poor not being able to live while being poor. That's what inflation causes and that's what bitcoin can prevent.  The "printing" of money is the mining of bitcoin and nobody is being charged interest for it. Once the coins are mined that's it, nobody is owed anything and therefore inflation will not continue.  Because once bitcoins exist they never desist. 

With paper money it degrades and they have to constantly print new money and create new anti-counterfeit measures, meaning those crispy new 100's that look like monopoly money in the US cost us yet ANOTHER unpayable loan to the fed.

Now couple bitcoin with endless electricity resources and you have the worlds first freely created and distributed currency.

[bornil267645]

Yeah, I think so , yes.

[countryfree]

Who cares about that?

Some people are smarter than others, and it's normal that some are richer than others. Some people may want to a revolution to change that, and it will probably end up not changing anything, but BTC has no built-in function to redistribute wealth. It's not its role, but it may still change a few things things as some early miners weren't rich when they started.

[itsAj]

FIAT poor people are poor due to lack of education and lack of desire to work. thus they dont improve their life to get better jobs.. (no aspirations)..

this is the most hilarious i heard of poor people, looks like you never seen the world outside your neighborhood,

you really have no respect for lots of people that are forced in certain poor situations, even nowadays.. even in western countries.. you know the world is not made only of spoiled middle class kids (the only one that fit your description)


anyway.. i believe the only way to achieve global and common wealth is to remove any currency, bitcoin included. there would not be anymore rich and poor but a collaborative world based on other kind of units/scales. i see in bitcoin a step forward that direction.

This really is mostly true for most poor people. There is a coloration between a person's wealth and their education (as well as their desire to work). How many people do you see in low wage jobs going above and beyond at work - very few because if they were willing to go above and beyond they would likely be quickly promoted.

It is not the job of bitcoin to "solve" income inequality (assuming that is even a problem). 

[cookmac]

Who cares about that?

Some people are smarter than others, and it's normal that some are richer than others. Some people may want to a revolution to change that, and it will probably end up not changing anything, but BTC has no built-in function to redistribute wealth. It's not its role, but it may still change a few things things as some early miners weren't rich when they started.

To be fair the question at hand is not whether its Bitcoin's purpose but whether its an effect Bitcoin has had.

And I'd argue it will but only on a very small scale.

[cbeast]

Bitcoin doesn't automatically help the poor, but it gives them a fighting chance. The wages they make won't be weakened by inflation due to rich people getting unfair loans made available only for the rich. If rich people are so good at creating jobs, then they should have no problem playing by the same rules.

[iluvpie60]

Hi guys/girls,

I'm sorry if my question is a bit stupid, however I'm a newbie when it comes to Bitcoin and there are a few things that just do not makes sense to me.

First Question

I've read somewhere that only 1000 individuals own nearly 50% of all the Bitcoins currently in circulation. This gives me some concern. I really like the whole idea behind Bitcoin, I think it could be revolutionary if my objective intellect has understood things correctly.

However, if Bitcoin were to take off, and one day (probably many years from now) be adopted worldwide, wouldn't these 1000 individuals literally be so rich they could influence the world like we have never seen? This is only the case if Money= Power. And wouldn't this mean that the rest of the 99.99999% of the population would be a lot less well off in the future than they are today due to the MASSIVE rich and poor divide?

Say for e.g there is roughly 10 trillion dollars in circulation worldwide today, would that not mean that people like the Winklevoss Twins (who have nearly 1% of all bitcoins) would be valued at USD 100 Billion. Is this not mad? Is this not what bitcoin was fighting?

Some people could argue too much power causes corruption. There is less equality. I mean with the introduction of Bitcoin and (possibly) the Outernet which is in development at the moment, this inequality could be mitigated, but who knows.

Second Question

How would recessions be controlled? I understand there are many 'specs' to economics, but if we were to delve into a recession, who would be there to help ease things? What about things like quantitive easing. With bitcoin, no central authority is control of money, which is AWESOME don't get me wrong, but I think it is human nature to desire some sort of security, something to look up to sort things out when the shit gets real.

Third Newbie Question (Technological)

Forgive my ignorance for this. I'm interested in buying bitcoin at the moment, but I just do not understand how the payment system works.

Say for e.g I buy a bitcoin off an exchange like coinbase. I want this coin secure, and so want to now remove it from the exchange and have it in my own hands. I have now removed it from the exchange, but what is to stop them from 'copying' the dat. file so even though I have this 'wallet' they could still have the key to take my bitcoin whenever they want? Even though I have this wallet, the bitcoin is actually stored in the blockchain right? So all they need is my private key to take ownership of the coin.

What if I were to take this file and make a copy, transferring this copy to a USB stick? A hacker could still access my computer which is connected to the internet, and have a peek (i.e through a trojan or keylogger) and a take a copy of my address which stores my private key? Even though I have stored the information on my USB, which is not connected to the internet, there is still a copy of the file on my computer, which can still be accessed, am I right? So creating my copies of this file, for backup purposes e.g corruption or lost file, just increases the chances of hackers finding my wallet and therefore increasing the chances of my bitcoin being stolen. I just don't understand.

Please, please, I understand these questions may seem dull to you guys, but maybe to the average IQ person who is new to bitcoin, this could be confusing. I'm really excited about the idea of bitcoin, but before I invest and participate in this chance to change the world, I want to make sure I am at least secure to some extent with regards to fraudulent activities and keeping my investment safe.

What do you guys think? Any advice positive or negative is welcome. Thanks for reading, Kash.

the smaller number of people will always have the most control. bitcoin is not democracy per se, but it does turn into democracy in a wierd way. in democracies the majority rule. thats why republics are usually better because in republics even the smallest person has rights.

bitcoin doesnt provide anything like a republic does, so it is more like a democracy that people "think" is decentralized. they only "think" this because there isn't "much" manipulation.

but i strongly assure you, the second another gox happens everyone will be screaming about how exchanges have too much control. wait until someone with tons and tons of coins does something we haven't seen yet. thats when the fun starts .