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>People .. ridicule cryptocurrencies, dismissing bitcoin as a scam, a Ponzi scheme or a bubble. >Wealth disparity is at record levels and the ultrarich have co

>People .. ridicule cryptocurrencies, dismissing bitcoin as a scam, a Ponzi scheme or a bubble. >Wealth disparity is at record levels and the ultrarich have cornered the market on every asset class, but with bitcoin, an entirely new economy has sprung into existence. That's the pitch for decentralized cryptocurrencies: They offer hope that there might be another, fairer way of doing things. The irony here is Bitcoin, like most other cryptocurrencies are structured similar to a pyramid scheme and highly favor existing capital to control the supply and exploiting users who join the network past a certain date where barrier to entry increases. They tell the story of acquiring this digital asset for a small capital sum, and simply passing it off to someone else for a greater sum. The intention is not utility but psychological exploitation of greater fools. http://bitcoin.stackexchange.com/questions/86/is-it-possible-to-estimate-the-gini-coefficient-for-bitcoins-and-if-the-trend-is http://bitcoin.stackexchange.com/questions/86/is-it-possible... http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 Best estimates (2014) 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

pmorici 9y ago
That maybe true of Bitcoin Core today but that isn't the vision expressed in the original Bitcoin. The true spirit of Bitcoin lives on today in Bitcoin Cash.
- cryptodogemoon 9y ago
  What?.. All versions of Bitcoin share the exploitative inverse log curve for distribution and work input. Bitcoin cash further changed the difficulty algorithm to benefit ASIC miners during a very brief window of time. Fees are reduced, and bandwidth has increased but the same design flaws are shared from Satoshi's algorithm. So you're completely incorrect.
  - pmorici 9y ago
    It isn’t about mining it is about empowering everyone to be able to transact without middlemen.
    - cryptodogemoon 9y ago
      The mining algorithms are the source of the supply, the most important element. There are many other blockchain designs now, so Bitcoin is already obsolete.
    - UncleMeat 9y ago
      Which isn't effective at ending hierarchies if the distribution of coins is even more unequal than existing power structures.
    - b1daly 9y ago
      That’s not what it’s about now. Obviously these digital tokens are a great medium for speculative gambling. Among the many problems of bitcoin as money, is the speculative aspect increases price volatility, which reduces utility as currency. The bizarre thing to me is that bitcoin is a (less than) zero sum game. Meaning the funds for someone’s new Lambo came from others, who instead of having a new Lambo, or shirt, or food, now have “ownership” rights to a digital token. I have a hard time believing that non-owners are going to be happy just handing over real wealth to those prescient enough to buy bitcoin. On the other hand, the mania of speculative bubbles can drive insane valuations, ultimately resulting between transfers of wealth. In the mortgage backed securities, the losses to the losers were so catastrophic, that they were socialized to a degree, and taxpayers wound up footing part of the bill. If you think about that, that every loss for someone, is a win for someone else, the winners in the MBS game truly made out like bandits. This bitcoin mania can run a long time, but the higher the price goes, the less likely it will be adopted for its ostensible purpose.
- sergiotapia 9y ago
  bcash is just a cash grab from some no name scammer.
JBlue42 9y ago
Instead of the speculative market, why hasn't any of the coins been pegged to a currency like USD or Swiss franc so that it can actually be used more as a currency? I've read a little about Tether, and that some of the others in this category have failed. Is it a difficult space because it needs some sort of regulation / management vs the decentralization that is promised by cryptocurrencies?
- cryptodogemoon 9y ago
  Who controls the production of such a system? Currently tether is presumed to be manipulated by its maintainers. https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest
  - JBlue42 9y ago
    Well, that's why I was posing the question to you since you seemed more knowledgeable about all this. I've only started to take time to catch up on this since the past weekend. Not to invest/speculate in the currencies but I figured it was time to learn more about the blockchain technology itself. Re: Tether - I had only came across that they were 'hacked'. Didn't know anything about fraud. Thanks for the link.
  - ryanlol 9y ago
    Tether prices do not seem to reflect this presumption.
jeffwass 9y ago
Part of the irony around bitcoin is that some of the early users of Bitcoin are from the Occupy Wall Street movement. We all remember hearing them request donations via btc, people giving thousands of btc for them to buy pizzas. I think (entirely without proof) it's likely that many of these organisers were/are holding large quantities of bitcoins themselves and have become unwitting millionaires. I haven't heard anybody mention this before, but I'm very curious to know if this bears any grain of truth. If the people who led rallies against the top 1% suddenly find themselves deep inside that 1% tail.
- jeffwass 9y ago
  Why in the world was this downvoted?
- mirimir 9y ago
  I don't know about Occupy Wall Street specifically. But I do suspect that many of the Bitcoin 1% have cryptoanarchist roots. The smart ones have diversified, of course. Maybe they'll do some good. Whatever that is. It's hard to tell, anymore.
- yodsanklai 9y ago
  > I think (entirely without proof) it's likely that many of these organisers were/are holding large quantities of bitcoins themselves and have become unwitting millionaires. I suspect (no proof either) many early bitcoin adopters sold most of their bitcoins long ago. They cashed out when their capital reached a significant amount, long before becoming millionnaire. For instance, I suppose that if today my BC portfolio were worth $5000, I'd sell them (because I certainly would not buy $5000 worth of BC today if I had none).
  - WA 9y ago
    Why sell all? They could’ve sold in stages and thus, still hold some BTC that make them millionaires.
  - charlesdm 9y ago
    Maybe, but does it matter? If you made a few million, should you be sad because you missed out on a few more? The first (few) million are life changing. But the difference between 20 and 100m is flying private and owning a yacht vs flying first and chartering one for the week.
teekert 9y ago
It's also very ironic if you think that in the bitcoin based economy you have to pay more than half of your groceries cost to the transaction itself. Bitcoin is inferior, it is for speculators, no longer for the idealists I count myself among. Yesterday I wanted to install bitcoin core... the blockchain is 153 GB and will eat CPU for days to validate everything. It's crazy. If I look at my early transaction history, I transferred mere euros around and they arrived and were confirmed in seconds/minutes. Unthinkable now. We need something else.
- ringaroundthetx 9y ago
  > Yesterday I wanted to install bitcoin core Why did you want to do that? Altruism? Just so that you could truthfully write this comment? Bitcoin users don't have to do that.
  - teekert 9y ago
    It was my understanding that doing this contributes to the decentralized character of Bitcoin and helps confirm transactions (I may be wrong). If so, this is now nolonger something mortals can do. Yeah, perhaps, call it altruism. I contribute some CPU cycles on my server to balance the power of the network. Or am I misunderstanding? Is it all about the miners?
    - deleted 9y ago
      [deleted]
    - drngdds 9y ago
      Bitcoin mining is dominated by ASIC farms. You'd make more of a difference running a node for an ASIC-resistant coin. (Or by saving energy and not mining at all.)
- clarkmoody 9y ago
  > Yesterday I wanted to install bitcoin core... the blockchain is 153 GB and will eat CPU for days to validate everything. It's crazy. It's not crazy when you realize that you've verified that you own your coins and that the money supply is correct without having to trust anyone. And all you had to do was commit some disk space and CPU cycles. > Unthinkable now. We need something else. As soon as that "something else" becomes as popular as Bitcoin, it will suffer the same issues.
flashdance 9y ago
Your source uses poor methodology to calculate inequality, and is really outdated. The 2014 article you're citing uses this 2013 article [1] as a source. This uses data from bitcoinrichlist.com, which contains balances for all active bitcoin addresses at the time. This sort of blockchain analysis isn't super useful, especially in 2017, because some extremely-rich people have funds in multiple addresses and some extremely-rich addresses contain funds for multiple people. The richest bitcoin address in 2017 has 1.8B worth of bitcoin, but it's the cold storage address for hundreds of thousands of bitfinex users [2]. It's possible that many of the other addresses on the richlist are coinbase vault addresses or cold storage addresses for other custodial wallets. The important part is that, with some publicly disclosed exceptions, we don't know if a rich address belongs to a single person or an organization. Meanwhile, the poorest addresses contain UTXOs worth pennies that cost more in fees to send than they're worth. These addresses have been completely abandoned by their users and have no practical owner. Even addresses with a spendable balance don't correspond to one user ever since Hierarchical Deterministic address generation has become the standard. HD wallets generate a new address for every incoming transaction for greater privacy [3]. A typical user may have their funds spread over dozens of addresses. That being said, I'm sure wealth is highly concentrated in the bitcoin ecosystem: it's just very hard to quantify to what degree it is. Disclaimer: I hold bitcoin and some other cryptocurrencies. [1] http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12?r=US&IR=T&IR=T http://www.businessinsider.com/927-people-own-half-of-the-bi... [2] https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmc... [3] https://support.mycelium.com/hc/en-us/articles/207045475-What-does-HD-in-HD-Wallet-mean- https://support.mycelium.com/hc/en-us/articles/207045475-Wha...
- benmowa 9y ago
  forgive my shock but are you saying there is one single private key out there that unlocks 1.8B USD? edit: nvm you linked it second. that seems insanely risky to put it all in one address, right?
  - flashdance 9y ago
    One public key contains 1.8B USD, but take a look at the address again: 3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r See how it starts with a 3? Most normal bitcoin addresses start with a 1. The 3 means that it's a pay to script hash address, which means that its likely a multisignature address. Multisig addresses require multiple signatures to send funds. This could be two out of three possible signatures, seven out of seven possible signatures, fifty out of one hundred possible signatures, it all depends how it is configured. In short though it kind of works like nuclear weapons where you need multiple keys help by different people to authenticate a transaction.

pmorici 9y ago

That maybe true of Bitcoin Core today but that isn't the vision expressed in the original Bitcoin. The true spirit of Bitcoin lives on today in Bitcoin Cash.

cryptodogemoon 9y ago
What?.. All versions of Bitcoin share the exploitative inverse log curve for distribution and work input. Bitcoin cash further changed the difficulty algorithm to benefit ASIC miners during a very brief window of time. Fees are reduced, and bandwidth has increased but the same design flaws are shared from Satoshi's algorithm. So you're completely incorrect.
- pmorici 9y ago
  It isn’t about mining it is about empowering everyone to be able to transact without middlemen.
  - cryptodogemoon 9y ago
    The mining algorithms are the source of the supply, the most important element. There are many other blockchain designs now, so Bitcoin is already obsolete.
  - UncleMeat 9y ago
    Which isn't effective at ending hierarchies if the distribution of coins is even more unequal than existing power structures.
  - b1daly 9y ago
    That’s not what it’s about now. Obviously these digital tokens are a great medium for speculative gambling. Among the many problems of bitcoin as money, is the speculative aspect increases price volatility, which reduces utility as currency. The bizarre thing to me is that bitcoin is a (less than) zero sum game. Meaning the funds for someone’s new Lambo came from others, who instead of having a new Lambo, or shirt, or food, now have “ownership” rights to a digital token. I have a hard time believing that non-owners are going to be happy just handing over real wealth to those prescient enough to buy bitcoin. On the other hand, the mania of speculative bubbles can drive insane valuations, ultimately resulting between transfers of wealth. In the mortgage backed securities, the losses to the losers were so catastrophic, that they were socialized to a degree, and taxpayers wound up footing part of the bill. If you think about that, that every loss for someone, is a win for someone else, the winners in the MBS game truly made out like bandits. This bitcoin mania can run a long time, but the higher the price goes, the less likely it will be adopted for its ostensible purpose.
sergiotapia 9y ago
bcash is just a cash grab from some no name scammer.

JBlue42 9y ago

Instead of the speculative market, why hasn't any of the coins been pegged to a currency like USD or Swiss franc so that it can actually be used more as a currency? I've read a little about Tether, and that some of the others in this category have failed. Is it a difficult space because it needs some sort of regulation / management vs the decentralization that is promised by cryptocurrencies?

cryptodogemoon 9y ago
Who controls the production of such a system? Currently tether is presumed to be manipulated by its maintainers. https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest
- JBlue42 9y ago
  Well, that's why I was posing the question to you since you seemed more knowledgeable about all this. I've only started to take time to catch up on this since the past weekend. Not to invest/speculate in the currencies but I figured it was time to learn more about the blockchain technology itself. Re: Tether - I had only came across that they were 'hacked'. Didn't know anything about fraud. Thanks for the link.
- ryanlol 9y ago
  Tether prices do not seem to reflect this presumption.

jeffwass 9y ago

Part of the irony around bitcoin is that some of the early users of Bitcoin are from the Occupy Wall Street movement. We all remember hearing them request donations via btc, people giving thousands of btc for them to buy pizzas. I think (entirely without proof) it's likely that many of these organisers were/are holding large quantities of bitcoins themselves and have become unwitting millionaires. I haven't heard anybody mention this before, but I'm very curious to know if this bears any grain of truth. If the people who led rallies against the top 1% suddenly find themselves deep inside that 1% tail.

jeffwass 9y ago
Why in the world was this downvoted?
mirimir 9y ago
I don't know about Occupy Wall Street specifically. But I do suspect that many of the Bitcoin 1% have cryptoanarchist roots. The smart ones have diversified, of course. Maybe they'll do some good. Whatever that is. It's hard to tell, anymore.
yodsanklai 9y ago
> I think (entirely without proof) it's likely that many of these organisers were/are holding large quantities of bitcoins themselves and have become unwitting millionaires. I suspect (no proof either) many early bitcoin adopters sold most of their bitcoins long ago. They cashed out when their capital reached a significant amount, long before becoming millionnaire. For instance, I suppose that if today my BC portfolio were worth $5000, I'd sell them (because I certainly would not buy $5000 worth of BC today if I had none).
- WA 9y ago
  Why sell all? They could’ve sold in stages and thus, still hold some BTC that make them millionaires.
- charlesdm 9y ago
  Maybe, but does it matter? If you made a few million, should you be sad because you missed out on a few more? The first (few) million are life changing. But the difference between 20 and 100m is flying private and owning a yacht vs flying first and chartering one for the week.

teekert 9y ago

It's also very ironic if you think that in the bitcoin based economy you have to pay more than half of your groceries cost to the transaction itself. Bitcoin is inferior, it is for speculators, no longer for the idealists I count myself among. Yesterday I wanted to install bitcoin core... the blockchain is 153 GB and will eat CPU for days to validate everything. It's crazy. If I look at my early transaction history, I transferred mere euros around and they arrived and were confirmed in seconds/minutes. Unthinkable now. We need something else.

ringaroundthetx 9y ago
> Yesterday I wanted to install bitcoin core Why did you want to do that? Altruism? Just so that you could truthfully write this comment? Bitcoin users don't have to do that.
- teekert 9y ago
  It was my understanding that doing this contributes to the decentralized character of Bitcoin and helps confirm transactions (I may be wrong). If so, this is now nolonger something mortals can do. Yeah, perhaps, call it altruism. I contribute some CPU cycles on my server to balance the power of the network. Or am I misunderstanding? Is it all about the miners?
  - deleted 9y ago
    [deleted]
  - drngdds 9y ago
    Bitcoin mining is dominated by ASIC farms. You'd make more of a difference running a node for an ASIC-resistant coin. (Or by saving energy and not mining at all.)
clarkmoody 9y ago
> Yesterday I wanted to install bitcoin core... the blockchain is 153 GB and will eat CPU for days to validate everything. It's crazy. It's not crazy when you realize that you've verified that you own your coins and that the money supply is correct without having to trust anyone. And all you had to do was commit some disk space and CPU cycles. > Unthinkable now. We need something else. As soon as that "something else" becomes as popular as Bitcoin, it will suffer the same issues.

flashdance 9y ago

Your source uses poor methodology to calculate inequality, and is really outdated. The 2014 article you're citing uses this 2013 article [1] as a source. This uses data from bitcoinrichlist.com, which contains balances for all active bitcoin addresses at the time. This sort of blockchain analysis isn't super useful, especially in 2017, because some extremely-rich people have funds in multiple addresses and some extremely-rich addresses contain funds for multiple people. The richest bitcoin address in 2017 has 1.8B worth of bitcoin, but it's the cold storage address for hundreds of thousands of bitfinex users [2]. It's possible that many of the other addresses on the richlist are coinbase vault addresses or cold storage addresses for other custodial wallets. The important part is that, with some publicly disclosed exceptions, we don't know if a rich address belongs to a single person or an organization. Meanwhile, the poorest addresses contain UTXOs worth pennies that cost more in fees to send than they're worth. These addresses have been completely abandoned by their users and have no practical owner. Even addresses with a spendable balance don't correspond to one user ever since Hierarchical Deterministic address generation has become the standard. HD wallets generate a new address for every incoming transaction for greater privacy [3]. A typical user may have their funds spread over dozens of addresses. That being said, I'm sure wealth is highly concentrated in the bitcoin ecosystem: it's just very hard to quantify to what degree it is. Disclaimer: I hold bitcoin and some other cryptocurrencies. [1] http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12?r=US&IR=T&IR=T http://www.businessinsider.com/927-people-own-half-of-the-bi... [2] https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmc... [3] https://support.mycelium.com/hc/en-us/articles/207045475-What-does-HD-in-HD-Wallet-mean- https://support.mycelium.com/hc/en-us/articles/207045475-Wha...

benmowa 9y ago
forgive my shock but are you saying there is one single private key out there that unlocks 1.8B USD? edit: nvm you linked it second. that seems insanely risky to put it all in one address, right?
- flashdance 9y ago
  One public key contains 1.8B USD, but take a look at the address again: 3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r See how it starts with a 3? Most normal bitcoin addresses start with a 1. The 3 means that it's a pay to script hash address, which means that its likely a multisignature address. Multisig addresses require multiple signatures to send funds. This could be two out of three possible signatures, seven out of seven possible signatures, fifty out of one hundred possible signatures, it all depends how it is configured. In short though it kind of works like nuclear weapons where you need multiple keys help by different people to authenticate a transaction.