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The author of the main article is Nick Szabo, who some theorize as the most likely candidate for being Satoshi Nakamoto. Szabo developed an early cryptocurrency

The author of the main article is Nick Szabo, who some theorize as the most likely candidate for being Satoshi Nakamoto. Szabo developed an early cryptocurrency called Bit Gold, which was never implemented, but has been called "a direct precursor to the Bitcoin architecture.". https://en.wikipedia.org/wiki/Nick_Szabo https://en.wikipedia.org/wiki/Nick_Szabo Was there a reason this comment was flagged? It seemed very relevant given the topic and recent trends in cryptocurrencies. Please discuss if there's critique; the comment: The Origins of Cryptocurrencies, with Bitcoin or Ethereum in particular are really important for people to be aware of. These "coins" were produced simply by running some software. If you look at the math under the hood, you'll notice the algorithm distributed most of the coins essentially for free to a very very small group of people. 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 (http://www.businessinsider.com/927-people-own-half- of-the-bitcoins-2013-12). The concentration of Litecoin ownership is similar (http://litecoin-rich-list.blogspot.com). Most of the big wallets have been in place from early on, so sitting back and watching your capital grow has been a very successful strategy. 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 http://www.businessinsider.com/bitcoin-inequality-2014-1 http://www.businessinsider.com/bitcoin-inequality-2014-1 It's essentially a penny stock deception, where the early users who generated the coins for low cost, or free, control the majority of the supply to manipulate the market spot price and than launch marketing campaigns and propaganda in an attempt to convince the uninformed public to buy their software coins. While there may be issues with fiat systems, it's far better than purchasing any of these crypto beanie baby schemes. Case study in cryptocoin market manipulation: https://pastebin.com/RdRAULtT https://pastebin.com/RdRAULtT https://pastebin.com/1NTTBCXM https://pastebin.com/1NTTBCXM https://news.ycombinator.com/item?id=7126153 https://news.ycombinator.com/item?id=7126153

CryptoPunk 9y ago
>>It's essentially a penny stock deception, where the early users who generated the coins for low cost, or free, control the majority of the supply to manipulate the market spot price and than launch marketing campaigns and propaganda in an attempt to convince the uninformed public to buy their software coins. While I welcome a debate on the public welfare effects of cryptocurrencies vs fiat, and disagree with your broad brushing of it as a "deception", this is really off-topic.
- doots 9y ago
  The distribution of cryptocurrency and unfair access to minting and production of what's claimed and marketed as currency is completely relevant given the subject of the paper. The math behind Bitcoin or altcoins reveals a system that grants production of the supply to a minority which worsens with time. New users aware of the game theory behind the math know it's not worth buying or mining. Of course, one can gamble on an irrational market or the other users who lack understanding of the mechanics.
  - CryptoPunk 9y ago
    I don't see how cryptocurrency and the issue of whether its mining is fair (I would argue its the fairest method of distribution ever devised, given in the case of every major cryptocurrency, 1. information about it was published before mining on it began, even if only a small number of nerds had the foresight to immediately take advantage of that information, and 2. its mining method makes for a totally competitive market that is blind to any factor except time and capital expended, but I digress) is relevant to a paper on the origins of money. If the OP has an axe to grind against it and those with the foresight to start mining early, maybe they can wait for a more relevant story to emerge. As it is, the comment is guaranteed to rapidly divert attention away from the main topic of the submission into yet another debate over cryptocurrency.
    - nosuchthing 9y ago
      The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange". While future iterations may change, we can examine existing implementations. Upon investigation of the math/economics/game theory behind Bitcoin and most other existing altcoins it becomes evident that the longer a cryptocurrency has existed, incentive to opt in decreases due to the work economics baked into the code. Old users expend low capital costs to produce a product (in this case an alternative money token), and then the rules change for new users who exert the same work energy to receive less payment. (early users were paid in larger block rewards for less effort, i.e. a user with a CPU on day 5 will be paid signifigantly more than a user with the exact same CPU on day 500, and by day 5000 the same work is worthless) An economic model that pays some people more for the exact same work is exploitative. If all users are paid a consistent amount for the same work, this particular disincentive for new users would not be a problem.

CryptoPunk 9y ago

>>It's essentially a penny stock deception, where the early users who generated the coins for low cost, or free, control the majority of the supply to manipulate the market spot price and than launch marketing campaigns and propaganda in an attempt to convince the uninformed public to buy their software coins. While I welcome a debate on the public welfare effects of cryptocurrencies vs fiat, and disagree with your broad brushing of it as a "deception", this is really off-topic.

doots 9y ago
The distribution of cryptocurrency and unfair access to minting and production of what's claimed and marketed as currency is completely relevant given the subject of the paper. The math behind Bitcoin or altcoins reveals a system that grants production of the supply to a minority which worsens with time. New users aware of the game theory behind the math know it's not worth buying or mining. Of course, one can gamble on an irrational market or the other users who lack understanding of the mechanics.
- CryptoPunk 9y ago
  I don't see how cryptocurrency and the issue of whether its mining is fair (I would argue its the fairest method of distribution ever devised, given in the case of every major cryptocurrency, 1. information about it was published before mining on it began, even if only a small number of nerds had the foresight to immediately take advantage of that information, and 2. its mining method makes for a totally competitive market that is blind to any factor except time and capital expended, but I digress) is relevant to a paper on the origins of money. If the OP has an axe to grind against it and those with the foresight to start mining early, maybe they can wait for a more relevant story to emerge. As it is, the comment is guaranteed to rapidly divert attention away from the main topic of the submission into yet another debate over cryptocurrency.
  - nosuchthing 9y ago
    The question purposed is "are cryptocurrencies a worthy alternative to existing mediums of exchange". While future iterations may change, we can examine existing implementations. Upon investigation of the math/economics/game theory behind Bitcoin and most other existing altcoins it becomes evident that the longer a cryptocurrency has existed, incentive to opt in decreases due to the work economics baked into the code. Old users expend low capital costs to produce a product (in this case an alternative money token), and then the rules change for new users who exert the same work energy to receive less payment. (early users were paid in larger block rewards for less effort, i.e. a user with a CPU on day 5 will be paid signifigantly more than a user with the exact same CPU on day 500, and by day 5000 the same work is worthless) An economic model that pays some people more for the exact same work is exploitative. If all users are paid a consistent amount for the same work, this particular disincentive for new users would not be a problem.