Bitcoin - Increasing the rich and poor divide?

[kashivre]

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.

[Bit_Happy]

...
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.  

[AliceWonder]

Bitcoin is a boon to the poor.

They may not be getting rich off of it but that's not the issue.

The issue is banks like Chase etc. look for ways to steal from the poor and give to the rich - those who control the flow of money have all the power.
Example, a lot of minimum wage employees are now paid with debit cards where they are charged a fee just for checking the damn balance.

And a lot of these poor people don't have an option because they can't open bank accounts.

Bitcoin puts that control over money flow back where it belongs, in the hands of the people - regardless of income level.

Regardless of income level, you can use bitcoin. There are no requirements or approval process to open a wallet account. You can't bounce checks because of un-expected fees that then result in even more fees.

The rich/poor divide is increasing but it is increasing because of the current financial system we have in place and because of increasing cost of education.

Bitcoin brings banking to the poor, it will help them, not hurt them.

I remember reading the story of a single mother I believe in Texas. She works for minimum wage and is paid with a debit card that gives 1 free withdrawal a month, every use after that she has to pay a fee.
So she withdraws it all and keeps it in a shoebox under her bed where it it susceptible to theft or burning if there is a fire etc. Breaks my heart.

[PolarPoint]

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)

[halfawake]

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.

You've hit on some fundamental weaknesses of bitcoin here.  This is part of the reason why I've invested in bitcoin despite it being a high risk investment.  There's a small chance that it does take off like crazy, and I don't want to miss the huge appreciation in value that would happen if this happens.  Granted, I won't have nearly as much as the Wiklevoss twins, but it'd be worth a fair amount if bitcoin truly takes over.

Bitcoin doesn't solve the income inequality problem.  In fact, I'd agree with you that over the long run, it makes it worse, especially given your second point.  If bitcoin was truly the only currency in the world, quantitative easing would be pretty much impossible.   If we ever truly get to that point, those of us with several bitcoins will have the equivalent amount of dollars that are worth so much that we'll essentially be set for life.  The same can't be said for the people who are ignoring bitcoin right now, they'll be worse off than we are now.

Arguably, a purely bitcoin based economy makes income equality worse.  Income taxes may be impossible with only bitcoins.  If that ends up happening, we'd switch to sales taxes, which would be worse off for the poor because income taxes are progressive in most places, but places that only have sales taxes are regressive - they cost the poor a much greater percentage of their income than they do the rich / well off.

I'm really glad you ask the third question as it's much better to ask this than have your wallet hacked and lose your hard earned bitcoins.  This is the greatest weakness of bitcoins in my opinion, there are a lot of trojans out there that will happily steal your bitcoins if you aren't really careful.  But as far as your first part of this question, if you take your bitcoins out of Coinbase, you'll be transferring them to an address controlled only by you.  The only way that Coinbase would still have control of your bitcoins would be if you take your bitcoin address in Coinbase and import them into your wallet rather than sending them to yourself.

But yes, the risk of hackers is ever present.  It's interesting that you mention Coinbase having control and then hackers right afterwards.  Personally, if you don't have rock solid security, which means a cold storage wallet where you keep your bitcoins in a wallet generated on a computer that never accesses the internet and only transfer them using a USB key to connect to your online computer, you're probably better off keeping your bitcoins on Coinbase.  So long as you don't turn the API key on with Coinbase, you have a much greater chance having your bitcoins stolen on an online computer than you do of having them stolen on Coinbase.

[Ron~Popeil]

There will always be wealthy people and poor people. Bit coin simply provides a more level playing field. Governments can't manipulate bit coin and use it to favor the wealthy elite. 

[BitProdigy]

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.

"Is this not what bitcoin was fighting?" No. Bitcoin is not fighting the wealth distribution problem. Bitcoin is fighting the necessity to Trust a Central Authority problem. Those people who have enormous amounts of Bitcoin may very have so much power that they could do some very sinister things if they wanted to, but what they cannot do is print bitcoins out of thin air, or tell me what I can and can't do with mine. IMO they acquired these Bitcoins fair and square, and they can use those bitcoins to make purchases just like all of us can. I see nothing alarming about this except for the fact that they can buy satellite laser guns and buy of politicians to pass laws they want passed, but these types of issues can be dealt with. The fact that they have a whole bunch of bitcoins is not a problem in itself. The difference is: if they want more they have to earn them, they can't just create them out of thin air like the Federal Reserve does and therefore enslave the common man to their wishes and whims.

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.

The price of freedom is responsibility. Recessions will not be "controlled" anymore than my household finances are. This fear is what created the monster we are now in the process of dismantling. We have learned that the threat of an occasional recession is preferable to the threat of Fascist Government growing like a cancer out of the power we gave it to be our "Trusted Central Authority" to protect use from the fear of possible recessions.

It is time we took the training wheels off and faced the risk of falling and scraping a knee every once and while. Especially considering these training wheels of ours have morphed into a robot with a 50 cal. pointed straight out our head!

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.

What you do is create an Off-line Wallet. You either find a computer that has never been connected to the internet before or you get something like Ubuntu and run it on your computer instead of your regular OS, from there you create your wallet.dat without it ever touching the internet or ever having the possibility of touching a corrupted computer, you then save your wallet.dat on a USB and keep your public addresses handy so you can send Bitcoin to it whenever you want. Then go to your Coinbase account and send those Bitcoins to your off-line wallet's address. As soon as those bitcoins are on your off-line wallet's address, nothing having to do with coin base can effect those bitcoins, and there is virtually zero risk that your wallet.dat can be hacked. You can verify whenever you want by looking up your address on blockchain.org that you have the bitcoins in your wallet, and when you are ready you can connect that wallet to the internet and load the block chain and you will have those bitcoins in your wallet to spend or transfer to other wallets whenever you please.

[cbeast]

Even if one person held all the bitcoins until now because after 5 years nobody understood what it was about. Then we start to realize their value, it still wouldn't happen overnight. He might have sold them when they all got to a dollar. That's still the case. People are selling bitcoins because you can still buy them.

The second is a sociological question. Somehow people came to think they could be solved by bankers instead of The People.

The third question is a good one. Bitcoin is still very cheap and in its infancy. When it becomes easy to buy and secure, EVERYBODY will want some. Then the price will leave orbit. All I can say is do your own research. It can be done in several ways. There is no absolutely riskless method yet.

[AliceWonder]

Satoshi alone has a million Bitcoin and he used some sort of script to break it up into countless addresses.

Are you just making things up as you go?

No, Satoshi is my uncle. He told me.

[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.

[Ron~Popeil]

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.

In a free market people are free to come up with products and services that they can trade to these large holders for bit coin. It will even out over time as there are more and more ways to do that. The fiat economy works the same way but with artificial barriers in place to obtaining currency and of course it is also losing value every day.

[franky1]

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

[Elwar]

Just point me to the website where I can get a fiat loan from the Federal Reserve at its lowest interest rate with pre-inflated dollars that I can then invest before that inflation propagates throughout the economy (with the poor being the last ones to spend it, after the prices are all inflated).

No such website? Hmm, but the rich have such access.

The poor have just as much access to buying bitcoins as anyone.

[PolarPoint]

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)

[Ron~Popeil]

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

Excellent points. Sadly they are probably wasted words. It is easier to sit around and blame others than it is to go out and create something.

[redhawk979]

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

Really? I know there are some lazy people who deserve to be poor but many poor people aren't lazy fucks. Nobody wakes up and is like "wow I love sharing my 1 room house with 10 other people"

This is made even more hilarious by the fact people in Bitcoin land literally beg for tips and handouts all day every day for everything.

If you liked my informative insights, plz sent tips to 19U6GdGCmK3JtoQchRj5DsMX8pQSFUZSGh

[franky1]

Really? I know there are some lazy people who deserve to be poor but many poor people aren't lazy fucks. Nobody wakes up and is like "wow I love sharing my 1 room house with 10 other people"

This is made even more hilarious by the fact people in Bitcoin land literally beg for tips and handouts all day every day for everything.

If you liked my informative insights, plz sent tips to 19U6GdGCmK3JtoQchRj5DsMX8pQSFUZSGh

your quote that i done in green are those that have aspirations, but maybe have a bad resume/CV (lack of education /skills, or their references EG types of schools or types of previous employment) lets them down.

with bitcoins they dont have to worry about being 'working class' they dont have to worry about previous employment or the type of school they went to.

there is no biased mentality around bitcoin employment. everyone with ambition can start something. but your right those basement dwellers that just want free money for nothing will always cry that they are somehow the victim. its like they lay in the road doing nothing, then cry when they get hit by a car. if you want a better life, do something

[Bit_Happy]

Bitcoin - Increasing the rich and poor divide?
In many cases Bitcoin can help the poor a measurable amount. One example is people sending money to African relatives with Bitcoin to save on the huge Western Union/MoneyGram fees. In many areas, they are able to sell BTC for cash for almost no fees.

[cr1776]

Satoshi alone has a million Bitcoin and he used some sort of script to break it up into countless addresses.

Are you just making things up as you go?

It sure seems like he was making things up as he went. A script?

[jonald_fyookball]

in my opinion, Bitcoin will help wealth inequality because of it's deflationary nature.
In the current inflationary system, the rich tend to get richer because of investments.
Interest rates are low right now, but historically, all a rich person need do
is stick their money in the bank, and collect interest.

With Bitcoin being deflationary, banks will not pay interest on Bitcoin
deposits.  Therefore, a rich person spending their money will start
distributing their wealth.  Meanwhile the poor person gets the same
advantage of deflation without the barriers to entry (capital, infrastructure, know how)
of active investing.