Bitcoin as a socially fair currency

[Wooden Plate]

Sometimes in the history people didn't knew about Gold either,does that mean now they don't accept/adopt it as a payment option.It's the matter of time

[Anders]

They, the mega whales, want to keep dominating the markets and not let today's bitcoin owners become more powerful and wealthy than the mega whales. And those big traders can easily launch their own cryptocurrency once legal regulations are in place.

Hey! I came to think of another possibility. Governments will not allow any independent cryptocurrency to become too big. They will therefore introduce an official cryptocurrency.

Easier said than done. How do you propose they not allow bitcoin to become too big? And why would anyone else use their cryptocurrency?

The total value of bitcoin today is puny compared to the trillions of dollars being swapped around on the fiat exchanges. If some of the really big players decide to cooperate and issue their own cryptocurrency they can easily and quickly pump up the price of that currency, and then the smaller investors would start to follow in order to gain on the massive upward momentum. In this way their cryptocurrency could match bitcoin within a couple of months and then go up much further leaving bitcoin behind like pocket change.

[Bogleg]

They, the mega whales, want to keep dominating the markets and not let today's bitcoin owners become more powerful and wealthy than the mega whales. And those big traders can easily launch their own cryptocurrency once legal regulations are in place.

Hey! I came to think of another possibility. Governments will not allow any independent cryptocurrency to become too big. They will therefore introduce an official cryptocurrency.

Easier said than done. How do you propose they not allow bitcoin to become too big? And why would anyone else use their cryptocurrency?

The total value of bitcoin today is puny compared to the trillions of dollars being swapped around on the fiat exchanges. If some of the really big players decide to cooperate and issue their own cryptocurrency they can easily and quickly pump up the price of that currency, and then the smaller investors would start to follow in order to gain on the massive upward momentum. In this way their cryptocurrency could match bitcoin within a couple of months and then go up much further leaving bitcoin behind like pocket change.

Problem for bitcoin right now is it doesn't support smart contract.

Unless someone develop and integrate smart contract into btc, it will probably be left behind once smart contract coin emerges.

[Anders]

So how is that fair?

How do you define the word "fair"? What would you consider to be "fair", and how would this "fairness" be measured?

I mean fair in the sense that bitcoin could function as a general currency. Money is like the blood flow in the body. If the money is too disproportionally distributed or being hoarded and squatted on too much, then that will lead to something similar to a cardiovascular disease where the blood is being clogged up and with too little flow to some tissue. A modern information currency has the potential to be much more efficient and inclusive than that.

It's also about power distribution. Will governments and populations around the world accept that the tiny percentage of people who own bitcoins today become super wealthy and the most powerful people in the world? Maybe, but there is a chance that some other cryptocurrency will dethrone bitcoin just because of its potential towards very skewed wealth distribution. Maybe even replaced by another cryptocurrency that's even more disproportionally distributed! (See my previous post about the cryptocurrency for the big traders.)

[Anders]

They, the mega whales, want to keep dominating the markets and not let today's bitcoin owners become more powerful and wealthy than the mega whales. And those big traders can easily launch their own cryptocurrency once legal regulations are in place.

Hey! I came to think of another possibility. Governments will not allow any independent cryptocurrency to become too big. They will therefore introduce an official cryptocurrency.

Easier said than done. How do you propose they not allow bitcoin to become too big? And why would anyone else use their cryptocurrency?

The total value of bitcoin today is puny compared to the trillions of dollars being swapped around on the fiat exchanges. If some of the really big players decide to cooperate and issue their own cryptocurrency they can easily and quickly pump up the price of that currency, and then the smaller investors would start to follow in order to gain on the massive upward momentum. In this way their cryptocurrency could match bitcoin within a couple of months and then go up much further leaving bitcoin behind like pocket change.

Problem for bitcoin right now is it doesn't support smart contract.

Unless someone develop and integrate smart contract into btc, it will probably be left behind once smart contract coin emerges.

Ethereum is interesting but it seems to be more about technology waiting for practical use rather than something being practically used today.

[Rassah]

They, the mega whales, want to keep dominating the markets and not let today's bitcoin owners become more powerful and wealthy than the mega whales. And those big traders can easily launch their own cryptocurrency once legal regulations are in place.

Hey! I came to think of another possibility. Governments will not allow any independent cryptocurrency to become too big. They will therefore introduce an official cryptocurrency.

Easier said than done. How do you propose they not allow bitcoin to become too big? And why would anyone else use their cryptocurrency?

The total value of bitcoin today is puny compared to the trillions of dollars being swapped around on the fiat exchanges. If some of the really big players decide to cooperate and issue their own cryptocurrency they can easily and quickly pump up the price of that currency, and then the smaller investors would start to follow in order to gain on the massive upward momentum. In this way their cryptocurrency could match bitcoin within a couple of months and then go up much further leaving bitcoin behind like pocket change.

OK, so they spend a bunch of money to create a currency that they control. Then they put it up on an exchange, that they also control, and as people trade it, start buying MASSIVE amounts for billions of dollars, to pump up the price to Bitcoins level. But, all they really did is create another PalPal, with a floating exchange rate, while having none of the benefits offered by Bitcoin, since their currency is not decentralized, not anonymous, not politically neutral,  is entirely backed by their company (as opposed to not depending on engine), and completely closed off to development and innovation. As soon as they stop dumbing billions of their own dollars to pump it, that currency will crash back down to almost nothing, as people exit back to the only currency that actually has the features they were looking for in the first place.

This whole exercise would be as if Microsoft were to make their own Linux, pump it by PAYING you touy it, but leave everything that makes Linux competitive out of Linux (bad security, closed source, etc.).

[Anders]

They, the mega whales, want to keep dominating the markets and not let today's bitcoin owners become more powerful and wealthy than the mega whales. And those big traders can easily launch their own cryptocurrency once legal regulations are in place.

Hey! I came to think of another possibility. Governments will not allow any independent cryptocurrency to become too big. They will therefore introduce an official cryptocurrency.

Easier said than done. How do you propose they not allow bitcoin to become too big? And why would anyone else use their cryptocurrency?

The total value of bitcoin today is puny compared to the trillions of dollars being swapped around on the fiat exchanges. If some of the really big players decide to cooperate and issue their own cryptocurrency they can easily and quickly pump up the price of that currency, and then the smaller investors would start to follow in order to gain on the massive upward momentum. In this way their cryptocurrency could match bitcoin within a couple of months and then go up much further leaving bitcoin behind like pocket change.

OK, so they spend a bunch of money to create a currency that they control. Then they put it up on an exchange, that they also control, and as people trade it, start buying MASSIVE amounts for billions of dollars, to pump up the price to Bitcoins level. But, all they really did is create another PalPal, with a floating exchange rate, while having none of the benefits offered by Bitcoin, since their currency is not decentralized, not anonymous, not politically neutral,  is entirely backed by their company (as opposed to not depending on engine), and completely closed off to development and innovation. As soon as they stop dumbing billions of their own dollars to pump it, that currency will crash back down to almost nothing, as people exit back to the only currency that actually has the features they were looking for in the first place.

This whole exercise would be as if Microsoft were to make their own Linux, pump it by PAYING you touy it, but leave everything that makes Linux competitive out of Linux (bad security, closed source, etc.).

The WhaleCoin or what to call it would be just like bitcoin, a decentralized peer-to-peer cryptocurrency with anonymity etc.

[Anders]

"Citigroup currency analyst Steven Englander is out with a long Sunday note talking about everyone's favorite topic: digital currency.

In it, he makes an important observation about the extreme inequality in the Bitcoin world:

Best estimates are that there are about one million holders of Bitcoin;  47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost.  So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent
...
The distribution of Bitcoin holdings  looks much like the distribution of wealth in North Korea and makes the China’s and even the US’ wealth distribution look like that of a workers’ paradise. There are estimates of a  Gini coefficient of 0.88 for Bitcoin, but if anything the estimates are low if big holders own multiple wallets and the overall concentration of Bitcoin wealth is greater than in the sample used to estimate the coefficients" -- http://www.businessinsider.com/bitcoin-inequality-2014-1

"The Gini coefficient (also known as the Gini index or Gini ratio) (/dʒini/ jee-nee) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents. This is the most commonly used measure of inequality." -- http://en.wikipedia.org/wiki/Gini_coefficient

[wasserman99]

They, the mega whales, want to keep dominating the markets and not let today's bitcoin owners become more powerful and wealthy than the mega whales. And those big traders can easily launch their own cryptocurrency once legal regulations are in place.

Hey! I came to think of another possibility. Governments will not allow any independent cryptocurrency to become too big. They will therefore introduce an official cryptocurrency.

Easier said than done. How do you propose they not allow bitcoin to become too big? And why would anyone else use their cryptocurrency?

The total value of bitcoin today is puny compared to the trillions of dollars being swapped around on the fiat exchanges. If some of the really big players decide to cooperate and issue their own cryptocurrency they can easily and quickly pump up the price of that currency, and then the smaller investors would start to follow in order to gain on the massive upward momentum. In this way their cryptocurrency could match bitcoin within a couple of months and then go up much further leaving bitcoin behind like pocket change.

I am not sure what you mean by the "fiat exchange"....if you mean the foreign exchange market then I would have to disagree with you. The "players" in the foreign exchange market are central banks that are looking after their own economy. Central banks generally wants to make their national currency first stable and after that somewhat weak. A stable, but weak currency will make the exports less expensive in other countries, and imports more expensive making goods that are produced inside their country more favorable.

[azguard]

I am not sure what you mean by the "fiat exchange"....if you mean the foreign exchange market then I would have to disagree with you. The "players" in the foreign exchange market are central banks that are looking after their own economy. Central banks generally wants to make their national currency first stable and after that somewhat weak. A stable, but weak currency will make the exports less expensive in other countries, and imports more expensive making goods that are produced inside their country more favorable.

I totally agree with you. To many "players" are in this but not just the banks other big companies ass well.

And yes they have to create stable there's currency or product then they go to btc.

[Rassah]

The WhaleCoin or what to call it would be just like bitcoin, a decentralized peer-to-peer cryptocurrency with anonymity etc.

Then it would be no different from any other altcoin, except with an obvious pump-and-dump backing, and severe lack of developers (all the best cryptocoin devs are working on bitcoin)

[Rassah]

"Citigroup currency analyst Steven Englander is out with a long Sunday note talking about everyone's favorite topic: digital currency.

In it, he makes an important observation about the extreme inequality in the Bitcoin world:

Best estimates are that there are about one million holders of Bitcoin;  47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost.  So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent
...
The distribution of Bitcoin holdings  looks much like the distribution of wealth in North Korea and makes the China’s and even the US’ wealth distribution look like that of a workers’ paradise. There are estimates of a  Gini coefficient of 0.88 for Bitcoin, but if anything the estimates are low if big holders own multiple wallets and the overall concentration of Bitcoin wealth is greater than in the sample used to estimate the coefficients" -- http://www.businessinsider.com/bitcoin-inequality-2014-1

"The Gini coefficient (also known as the Gini index or Gini ratio) (/dʒini/ jee-nee) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents. This is the most commonly used measure of inequality." -- http://en.wikipedia.org/wiki/Gini_coefficient

Articles like these are very dishonest, because they don't take into account that bitcoin is a brand new technology just starting to be dispersed. A month after Bitcoin launched, only about 3 or 4 people owned it in total, with one of them owning almost all of it. Since Bitcoin isn't a central bank type system (where a privileged few keep making money for themselves), or a proof of stake system (where money gets concentrated to whoever has most of it by default), it's expected that bitcoin will keep getting dispersed among more and more people. Those who have a lot of it will keep spending it, and the only ones who will get more and more of it will be those who actually work to earn it.

[NapoleonBonaparte]

"Citigroup currency analyst Steven Englander is out with a long Sunday note talking about everyone's favorite topic: digital currency.

In it, he makes an important observation about the extreme inequality in the Bitcoin world:

Best estimates are that there are about one million holders of Bitcoin;  47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost.  So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent
...
The distribution of Bitcoin holdings  looks much like the distribution of wealth in North Korea and makes the China’s and even the US’ wealth distribution look like that of a workers’ paradise. There are estimates of a  Gini coefficient of 0.88 for Bitcoin, but if anything the estimates are low if big holders own multiple wallets and the overall concentration of Bitcoin wealth is greater than in the sample used to estimate the coefficients" -- http://www.businessinsider.com/bitcoin-inequality-2014-1

"The Gini coefficient (also known as the Gini index or Gini ratio) (/dʒini/ jee-nee) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents. This is the most commonly used measure of inequality." -- http://en.wikipedia.org/wiki/Gini_coefficient

Articles like these are very dishonest, because they don't take into account that bitcoin is a brand new technology just starting to be dispersed. A month after Bitcoin launched, only about 3 or 4 people owned it in total, with one of them owning almost all of it. Since Bitcoin isn't a central bank type system (where a privileged few keep making money for themselves), or a proof of stake system (where money gets concentrated to whoever has most of it by default), it's expected that bitcoin will keep getting dispersed among more and more people. Those who have a lot of it will keep spending it, and the only ones who will get more and more of it will be those who actually work to earn it.

There are also issue of lose wallets for those with huge balance. Those coins should considered gone forever and not to be taken into equality/distribution study.

[Coinfan]

I would change the title to Bitcoin as a socially unfair currency

The way future technology is introduced to mitigate the recognized unfairness has nothing to do with bitcoin.

Of course, this unfairness doesn't affect my feelings for bitcoin (my nick says it all), but our emotions shouldn't cloud us about its imperfections.

[Leina]

It may be lucky that many are not involved in bitcoin.

If they buy at peak. they would have lose more than half of the money at today price. Odd is also high of getting scammed by scammer or invested in pump and dump coins.

Securing wallet may not also be that easy for the non-techie. There are many reasons why they may be the lucky group and we are the unlucky group.

[realdope]

Fair and social = everyone is rich happy and goodlooking.

[bigtimespaghetti]

Socially fair is a broad term and as misleading as any usage of it in media.

The only socially fair currency is a populist pipe dream, because the 'wealth' accumulated from bitcoin is entirely a reflection of market forces. Since in free markets there are winners and losers (gains and losses), in your reflections the losers are ones who didn't know or didn't invest neither risking or truly losing anything.

[Coinfan]

The problem of the unfairness of bitcoin is not only about the distribution of the coins (some people don't have the knowledge or the information to buy it cheap), but also on the potential impact of bitcoin on the value of fiat if bitcoin becomes generally accepted.

In certain countries with high inflation, a general adoption of bitcoin will increase the dumping of the national currency, making things even worst for the ones that don't have bitcoin.

[wasserman99]

"Citigroup currency analyst Steven Englander is out with a long Sunday note talking about everyone's favorite topic: digital currency.

In it, he makes an important observation about the extreme inequality in the Bitcoin world:

Best estimates are that there are about one million holders of Bitcoin;  47 individuals hold about 30 percent, another 900 hold a further 20 percent, the next 10,000 about 25% and another million about 20%, with 5% being lost.  So 1/10th of one percent represent about half the holdings of Bitcoin and 1 percent close to 80 percent
...
The distribution of Bitcoin holdings  looks much like the distribution of wealth in North Korea and makes the China’s and even the US’ wealth distribution look like that of a workers’ paradise. There are estimates of a  Gini coefficient of 0.88 for Bitcoin, but if anything the estimates are low if big holders own multiple wallets and the overall concentration of Bitcoin wealth is greater than in the sample used to estimate the coefficients" -- http://www.businessinsider.com/bitcoin-inequality-2014-1

"The Gini coefficient (also known as the Gini index or Gini ratio) (/dʒini/ jee-nee) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents. This is the most commonly used measure of inequality." -- http://en.wikipedia.org/wiki/Gini_coefficient

Articles like these are very dishonest, because they don't take into account that bitcoin is a brand new technology just starting to be dispersed. A month after Bitcoin launched, only about 3 or 4 people owned it in total, with one of them owning almost all of it. Since Bitcoin isn't a central bank type system (where a privileged few keep making money for themselves), or a proof of stake system (where money gets concentrated to whoever has most of it by default), it's expected that bitcoin will keep getting dispersed among more and more people. Those who have a lot of it will keep spending it, and the only ones who will get more and more of it will be those who actually work to earn it.

There are also issue of lose wallets for those with huge balance. Those coins should considered gone forever and not to be taken into equality/distribution study.

I would partially disagree. I think that people who actually own large amount of bitcoin on behalf on themselves should be counted in this calculation. However there are many sites/exchanges that are holding bitcoin on behalf of others, and their cold wallet will likely have large amounts of bitcoin in it. These amounts should not be counted.

[oceans]

It's actually quite amazing how many people do not know about bitcoins to be honest and I agree it does make it unfair to those who are unable to understand who to start, where to buy and how to keep what they own safe. Many jumped on the wagon when bitcoin was first released and quickly became rich just by investing. I personally would love to see a world where everyone knew about and understood bitcoin, it's a shame that kind of world is too far off yet as I feel it would help a lot of people greatly if they had the chance to at least try and invest.