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It will be interesting to see Bitcoin sentiment shift as newcomers realize that the bulk of Bitcoin value is held by a small handful of early adopters, and that

It will be interesting to see Bitcoin sentiment shift as newcomers realize that the bulk of Bitcoin value is held by a small handful of early adopters, and that the bulk of Bitcoin mining capacity is held by a small handful of large mining companies. Cryptocurrency proponents are trying to get ahead of this by reframing Bitcoin as the people's currency, or an opportunity for average people to get rich while sticking it to evil governments. It's interesting to watch people with $1000 of Bitcoin in their Robinhood accounts feel like they're on the winning end of this deal when they see their $1000 investment go to $1300 in the span of a week. So much of the investment frenzy is driven by "what if" scenarios where Bitcoin takes over the world and that $1000 investment eventually makes early adopters millionaires in the new Bitcoin world order. The problem with that hypothetical endgame is that reallocating the world's wealth according to how early someone went all-in on a cryptocurrency gamble (and how much capital they had to invest at the time) would create inequality at unimaginable scale, not to mention completely disconnecting wealth from societal value creation. Our current market-based system isn't perfect, but a hypothetical Bitcoin economy would be downright absurd. If we end up with a crypto economy, it won't be underpinned by a currency where people switched over at values ranging from $0.01 to $1,000,000 per coin.

ratsmack 6y ago
Comparing the Gamestop fiasco to Bitcoin, Gamestop just looks like normal market activity, where Bitcoin looks like criminal pump and dump activity... in my opinion.
- t0mbstone 6y ago
  But bitcoin has been "pumped and dumped" so many times now that most of the people who were early investors have already cashed out long ago. What you are left with now is all the people who bought the bitcoin after it had already been pumped and dumped, and they aren't willing to sell it for less than they bought it for. This means that the perceived value of the asset is now based on the notions held by millions of people who are holding and don't want to sell.
  - notwedtm 6y ago
    How does this track with the fact that it's at the ATH right now, and has been steadily going up for some time?
    - ratsmack 6y ago
      Irrational exuberance is an amazing phenomenon... I've seen this before.
      - alwillis 6y ago
        You haven’t seen a new form of money (not currency) go from $0 to $1 trillion before. You haven’t seen something in the process of overtaking the market cap of gold—approximately $10 trillion. The first trillion takes the longest; the next trillion will probably happen in far less time.
TekMol 6y ago
Would it be much different from inheritance? Right from birth, one person is destined to be poor while the other destined to be a millionaire.
- DamnYuppie 6y ago
  So I as a parent from the fruit of my labors have no right to help my children through life? Also please note most millionaires in the world are self made, with over 80%. Of the other 20% most made it to millionaire status before receiving an inheritance. Also note the people you most worry about, the ones who get money young, usually plow through it and leave nothing for their children.
  - justicezyx 6y ago
    Wow, it's not unusual to see comments being contradicting each other by switching the side in the distance of one smartphone's screen. You cannot just state one thing from the side of later comer, and later switch to the side of early comer. That way you are saying 2 things...
    - DamnYuppie 6y ago
      I am aware that they are two separate thoughts but they don't, to me, conflict with each other. The main theme of both of them was to not worry about what others get from their parents. The first was recognizing that that inheritance mostly came from the labors of someone and they have a right to do with their money as they see fit. The second is acknowledging that the person who didn't work for their wealth usually squanders it so don't waste time being jealous of them. So focus on being the person who creates wealth for themselves and try to educate your children so they will have good money habits later on in life and will squander less of what you leave them.
      - 0xfaded 6y ago
        I want to put this out as a thought experiment. Given that current taxation policy is primarily derived from incomes, and an inheritance is by strict definition an income, then wouldn't it make sense for all incomes to be taxed equally? I'd be more sympathetic to inheritance if the primary source of taxation was wealth.
adhoc32 6y ago
You assume that early adopters still hold their Bitcoins. You are (mostly) wrong.
- Arrath 6y ago
  Has anyone ever estimated how many btc might be locked up in early adopter wallets who have since lost the passwords or the hard drive, etc?
  - deleted 6y ago
    [deleted]
  - iso1210 6y ago
    That number will only ever increase - bitcoin not only fails to grow in size with productivity and population, it actually shrinks. It's massively deflationary, which is a terrible thing for a currency.
  - thedudeabides5 6y ago
    Depends on Satoshi.
- BiteCode_dev 6y ago
  I concur, I had 140 btc 10 years ago. Sold it all when it reached $800, which I though was peak. I doubt the guy who sold the 5000 btc pizzas still have them.
- iso1210 6y ago
  Take this guy https://mobile.twitter.com/GregSchoen/status/70261648811761665 https://mobile.twitter.com/GregSchoen/status/702616488117616... Who lamented making $400 instead of $13k back in 2011. Those coins would today be worth about $95m, but there's no way he'd have kept them -- same as the buy who bought the pizzas (or the guy who sold them) This guy was bored of $14/coin, it wasn't moving https://twitter.com/rockerest/status/91885405368098816?lang=en https://twitter.com/rockerest/status/91885405368098816?lang=... So he took the loss (in July 2011 they were at a peak, jumping from 77 cents to $15 in 3 months) Had someone found an old laptop with the coins, they'd have been looking for it in the 2017 craze (ala Big Bang Theory) and sold then. Bitcoin is currently 3 times the peak in December 2017.
young_unixer 6y ago
> Bitcoin value is held by a small handful of early adopters, and that the bulk of Bitcoin mining capacity is held by a small handful of large mining companies. Yes. So what? I don't think the typical Bitcoin proponent is the kind of person to get outraged at Pareto distributions. They are against governments, they don't hate wealthy people just for being wealthy. > The problem with that hypothetical endgame is that reallocating the world's wealth according to how early someone went all-in on a cryptocurrency gamble (and how much capital they had to invest at the time) would create inequality at unimaginable scale, not to mention completely disconnecting wealth from societal value creation. How is that different from having invested in Amazon, Google or Apple in the early 00's? Bitcoin (and other cryptocurrencies) does bring value to our society as a store of wealth that's not easy for governments to control.
- deleted 6y ago
  [deleted]
- boh 6y ago
  > store of wealth It's funny how people keep saying this as if it's true. 99% of the market isn't buying crypto to "store value". This along with the idea that somehow it's a great currency bcs "no gov't" etc. is also a lie no one believes. Most of the market isn't actually making real-world transactions or storing value but somehow other people will start doing it in the future for some reason so gainz etc.
- jhanschoo 6y ago
  > Bitcoin (and other cryptocurrencies) does bring value to our society as a store of wealth that's not easy for governments to control. My personal take on this is that it's a temporary state of affairs. You might draw an analogy to the wild west of the Internet in the past, or e-mail. As Bitcoin goes mainstream, if it does, you will see familiar institutions built on it including fractional reserve banking that honor all the comfortable consumer things if you remain within their system.
- deleted 6y ago
  [deleted]
- 6y ago
samatman 6y ago
Your problem with this hypothetical endgame is an appeal to fairness. I understand why you'd want that, fairness is a strong human instinct, but I don't see where it has any bearing on the likelihood of this future occurring. People don't enjoy having a high number in their accounting system, they enjoy being wealthy. If, say, African central banks start purchasing BTC, and India joins them, early adopters will cash out at whatever value makes them feel like they got their money's worth. Some people will only trade for real property. Some are in a position to hodl until they can buy a whole cruise ship or whatever. Or they could lose it all when BTC crashes to the natural value of any completely hypothetical asset, which is zero. This still seems more likely to me than central banks taking up a position in BTC, but sadly, I lack the ability to predict the future. Is it really that different from buying the first iPod, and thinking to yourself, "y'know this is a brand new Apple, I'm putting a few thousand bucks into their stock"?
- loceng 6y ago
  "Or they could lose it all when BTC crashes to the natural value of any completely hypothetical asset, which is zero." It'll be interesting who's left "holding the bag" once its the end of the MLM-ponzi scheme of who you can convince to buy into it - save regulatory capture somehow forcing the rest of society to buy into it.
  - iso1210 6y ago
    > save regulatory capture somehow forcing the rest of society to buy into it. That's what happens, some little scheme gets too big to fail, so the taxpayer bails it out. Those that are in the schemes win, those that felt the scheme was stupid lose. I remember seeing adverts on the London underground for icelandic banks offer 5% more than any other savings account. I chuckled and thought "surely nobody's that gullible". There were many. Both individuals, who got bailed out by me (the taxpayer), and many councils (who lost money which belonged to the taxpayer) For 20 years I laughed at these various get quick schemes. Then I realised that they don't fail. Profits are privitised, losses are socialised, and they taxpayer always loses. When you realise that, you have to look at dodgy schemes in a whole separate light. Sure bitcoin is stupid, but as it gets larger and larger the chance of it failing without bailing out large institutions reduces, meaning the chance of me riding on the coattails increases.
GoldenMonkey 6y ago
Oh, it's a lot more than $1,000 to $1,300 in a week. If you had invested your $1,200 stimulus check in Bitcoin. It would now be worth $7,200. Where else can the average person make 6x's their money. And, it has already made plenty of average people. Millionaires.
- pjc50 6y ago
  People were saying this about Gamestop, and I need to remind you that the value can go down as well as up: https://www.dailymail.co.uk/news/article-9219447/GameStop-losses-pile-small-investors-stock-plunged-70-two-days.html https://www.dailymail.co.uk/news/article-9219447/GameStop-lo...
- vkou 6y ago
  > Where else can the average person make 6x's their money Go to Vegas, bet on red three times. Or, if you don't want to get on a plane during a pandemic, trade on margin.
- justin_oaks 6y ago
  It's only worth that much if you sell now. Same thing with stocks. It kills me to hear of people talk about how they "lost money" when a stock they own comes down from a temporary high price. No, you only lost money relative to your hypothetical self who sold at the top of the stock's price.
- creepto 6y ago
  Not a millionaire till you sell. I don't care about a crypto millionaire, show me the FIAT baby.
iamben 6y ago
All the "what if" is always pegged to another currency. I don't know anyone that prices anything in just BTC (it's all BTC converted from USD or whatever, because anything else would be madness) - and I don't know anyone that doesn't peg their bitcoin to what they'd get if they sold it for "real money". Which makes me think any endgame isn't going to be the utopian, governmentless, money-freedom future I keep hearing promised.
- tux1968 6y ago
  Not sure if it means anything, but the first thing I do when reading about the price of say some huge tunnel built in Europe is mentally convert the quoted Euro price to USD. Doesn't make the Euro any less real as a currency.
  - Jtsummers 6y ago
    The fact that a European project was priced in Euros suggests that Euros are more of a currency than BTC. Converting to USD is a matter of convenience for you. But within the European economy that same project would have a near comparable EUR price in 12 months as it does today. That is not true for things priced in BTC as the value of the BTC is wildly fluctuating (though generally trending up). Please find a contemporary (don't look to someone selling alpaca wool socks in 2010 and 2011), stable priced product line in BTC. Anything that I can be confident I will pay +/- 5% of the same BTC for over a 3 month period (I'm deliberately selecting a short period, most currencies are stable for 12+ months at a time when used to price goods and services).
    - tux1968 6y ago
      This is all new to me, and I don't have any interest in BTC at all. But volatility and crazy inflation does happen in the realm of real currencies. BTC is unique because it's happening at the start of its existence rather than in the traditional death-spiral. Nor is currency speculation unique to BTC, it happens every day with traditional currencies. But maybe BTC can be forgiven for its volatility since it's such a unique and new concept? As I understand it at some point there will be no new bitcoin left to mine, and it will just be available as a store-of-value currency -- if I have the concept correct. And the early adopters will be financially rewarded for helping to get it off the ground as they spend their BTC away into circulation.
dandanua 6y ago
> not to mention completely disconnecting wealth from societal value creation. You forget to mention that a lot of early adopters are actual criminals. Yeah, go make them the rulers of the world. Let's see how this ends.
- errantmind 6y ago
  Do you have a citation for this?
  - dandanua 6y ago
    Silk Road is just one example, there a lot more. Though, you can use logic. Money transfers without governments control is what criminals want the most.
kryptiskt 6y ago
I wouldn't worry, in a world where Bitcoin takes over, the economic logic is such that no power can be used for non-Bitcoin purposes until profitable mining has been arbitraged away. This means that the vast majority of power generation will be dedicated to hashing while the oceans rise and the environment dies. The people with the bitcoin will not find a whole lot to buy for the coins in the wasteland when it all has played out.
- throwawayyy1986 6y ago
  > This means that the vast majority of power generation will be dedicated to hashing while the oceans rise and the environment dies. You have no evidence for this claim, it's just a profusely fantastic image that cleaves to your political bias.

ratsmack 6y ago

Comparing the Gamestop fiasco to Bitcoin, Gamestop just looks like normal market activity, where Bitcoin looks like criminal pump and dump activity... in my opinion.

t0mbstone 6y ago
But bitcoin has been "pumped and dumped" so many times now that most of the people who were early investors have already cashed out long ago. What you are left with now is all the people who bought the bitcoin after it had already been pumped and dumped, and they aren't willing to sell it for less than they bought it for. This means that the perceived value of the asset is now based on the notions held by millions of people who are holding and don't want to sell.
- notwedtm 6y ago
  How does this track with the fact that it's at the ATH right now, and has been steadily going up for some time?
  - ratsmack 6y ago
    Irrational exuberance is an amazing phenomenon... I've seen this before.
    - alwillis 6y ago
      You haven’t seen a new form of money (not currency) go from $0 to $1 trillion before. You haven’t seen something in the process of overtaking the market cap of gold—approximately $10 trillion. The first trillion takes the longest; the next trillion will probably happen in far less time.

TekMol 6y ago

Would it be much different from inheritance? Right from birth, one person is destined to be poor while the other destined to be a millionaire.

DamnYuppie 6y ago
So I as a parent from the fruit of my labors have no right to help my children through life? Also please note most millionaires in the world are self made, with over 80%. Of the other 20% most made it to millionaire status before receiving an inheritance. Also note the people you most worry about, the ones who get money young, usually plow through it and leave nothing for their children.
- justicezyx 6y ago
  Wow, it's not unusual to see comments being contradicting each other by switching the side in the distance of one smartphone's screen. You cannot just state one thing from the side of later comer, and later switch to the side of early comer. That way you are saying 2 things...
  - DamnYuppie 6y ago
    I am aware that they are two separate thoughts but they don't, to me, conflict with each other. The main theme of both of them was to not worry about what others get from their parents. The first was recognizing that that inheritance mostly came from the labors of someone and they have a right to do with their money as they see fit. The second is acknowledging that the person who didn't work for their wealth usually squanders it so don't waste time being jealous of them. So focus on being the person who creates wealth for themselves and try to educate your children so they will have good money habits later on in life and will squander less of what you leave them.
    - 0xfaded 6y ago
      I want to put this out as a thought experiment. Given that current taxation policy is primarily derived from incomes, and an inheritance is by strict definition an income, then wouldn't it make sense for all incomes to be taxed equally? I'd be more sympathetic to inheritance if the primary source of taxation was wealth.

adhoc32 6y ago

You assume that early adopters still hold their Bitcoins. You are (mostly) wrong.

Arrath 6y ago
Has anyone ever estimated how many btc might be locked up in early adopter wallets who have since lost the passwords or the hard drive, etc?
- deleted 6y ago
  [deleted]
- iso1210 6y ago
  That number will only ever increase - bitcoin not only fails to grow in size with productivity and population, it actually shrinks. It's massively deflationary, which is a terrible thing for a currency.
- thedudeabides5 6y ago
  Depends on Satoshi.
BiteCode_dev 6y ago
I concur, I had 140 btc 10 years ago. Sold it all when it reached $800, which I though was peak. I doubt the guy who sold the 5000 btc pizzas still have them.
iso1210 6y ago
Take this guy https://mobile.twitter.com/GregSchoen/status/70261648811761665 https://mobile.twitter.com/GregSchoen/status/702616488117616... Who lamented making $400 instead of $13k back in 2011. Those coins would today be worth about $95m, but there's no way he'd have kept them -- same as the buy who bought the pizzas (or the guy who sold them) This guy was bored of $14/coin, it wasn't moving https://twitter.com/rockerest/status/91885405368098816?lang=en https://twitter.com/rockerest/status/91885405368098816?lang=... So he took the loss (in July 2011 they were at a peak, jumping from 77 cents to $15 in 3 months) Had someone found an old laptop with the coins, they'd have been looking for it in the 2017 craze (ala Big Bang Theory) and sold then. Bitcoin is currently 3 times the peak in December 2017.

young_unixer 6y ago

> Bitcoin value is held by a small handful of early adopters, and that the bulk of Bitcoin mining capacity is held by a small handful of large mining companies. Yes. So what? I don't think the typical Bitcoin proponent is the kind of person to get outraged at Pareto distributions. They are against governments, they don't hate wealthy people just for being wealthy. > The problem with that hypothetical endgame is that reallocating the world's wealth according to how early someone went all-in on a cryptocurrency gamble (and how much capital they had to invest at the time) would create inequality at unimaginable scale, not to mention completely disconnecting wealth from societal value creation. How is that different from having invested in Amazon, Google or Apple in the early 00's? Bitcoin (and other cryptocurrencies) does bring value to our society as a store of wealth that's not easy for governments to control.

deleted 6y ago
[deleted]
boh 6y ago
> store of wealth It's funny how people keep saying this as if it's true. 99% of the market isn't buying crypto to "store value". This along with the idea that somehow it's a great currency bcs "no gov't" etc. is also a lie no one believes. Most of the market isn't actually making real-world transactions or storing value but somehow other people will start doing it in the future for some reason so gainz etc.
jhanschoo 6y ago
> Bitcoin (and other cryptocurrencies) does bring value to our society as a store of wealth that's not easy for governments to control. My personal take on this is that it's a temporary state of affairs. You might draw an analogy to the wild west of the Internet in the past, or e-mail. As Bitcoin goes mainstream, if it does, you will see familiar institutions built on it including fractional reserve banking that honor all the comfortable consumer things if you remain within their system.
deleted 6y ago
[deleted]
6y ago

samatman 6y ago

Your problem with this hypothetical endgame is an appeal to fairness. I understand why you'd want that, fairness is a strong human instinct, but I don't see where it has any bearing on the likelihood of this future occurring. People don't enjoy having a high number in their accounting system, they enjoy being wealthy. If, say, African central banks start purchasing BTC, and India joins them, early adopters will cash out at whatever value makes them feel like they got their money's worth. Some people will only trade for real property. Some are in a position to hodl until they can buy a whole cruise ship or whatever. Or they could lose it all when BTC crashes to the natural value of any completely hypothetical asset, which is zero. This still seems more likely to me than central banks taking up a position in BTC, but sadly, I lack the ability to predict the future. Is it really that different from buying the first iPod, and thinking to yourself, "y'know this is a brand new Apple, I'm putting a few thousand bucks into their stock"?

loceng 6y ago
"Or they could lose it all when BTC crashes to the natural value of any completely hypothetical asset, which is zero." It'll be interesting who's left "holding the bag" once its the end of the MLM-ponzi scheme of who you can convince to buy into it - save regulatory capture somehow forcing the rest of society to buy into it.
- iso1210 6y ago
  > save regulatory capture somehow forcing the rest of society to buy into it. That's what happens, some little scheme gets too big to fail, so the taxpayer bails it out. Those that are in the schemes win, those that felt the scheme was stupid lose. I remember seeing adverts on the London underground for icelandic banks offer 5% more than any other savings account. I chuckled and thought "surely nobody's that gullible". There were many. Both individuals, who got bailed out by me (the taxpayer), and many councils (who lost money which belonged to the taxpayer) For 20 years I laughed at these various get quick schemes. Then I realised that they don't fail. Profits are privitised, losses are socialised, and they taxpayer always loses. When you realise that, you have to look at dodgy schemes in a whole separate light. Sure bitcoin is stupid, but as it gets larger and larger the chance of it failing without bailing out large institutions reduces, meaning the chance of me riding on the coattails increases.

GoldenMonkey 6y ago

Oh, it's a lot more than $1,000 to $1,300 in a week. If you had invested your $1,200 stimulus check in Bitcoin. It would now be worth $7,200. Where else can the average person make 6x's their money. And, it has already made plenty of average people. Millionaires.

pjc50 6y ago
People were saying this about Gamestop, and I need to remind you that the value can go down as well as up: https://www.dailymail.co.uk/news/article-9219447/GameStop-losses-pile-small-investors-stock-plunged-70-two-days.html https://www.dailymail.co.uk/news/article-9219447/GameStop-lo...
vkou 6y ago
> Where else can the average person make 6x's their money Go to Vegas, bet on red three times. Or, if you don't want to get on a plane during a pandemic, trade on margin.
justin_oaks 6y ago
It's only worth that much if you sell now. Same thing with stocks. It kills me to hear of people talk about how they "lost money" when a stock they own comes down from a temporary high price. No, you only lost money relative to your hypothetical self who sold at the top of the stock's price.
creepto 6y ago
Not a millionaire till you sell. I don't care about a crypto millionaire, show me the FIAT baby.

iamben 6y ago

All the "what if" is always pegged to another currency. I don't know anyone that prices anything in just BTC (it's all BTC converted from USD or whatever, because anything else would be madness) - and I don't know anyone that doesn't peg their bitcoin to what they'd get if they sold it for "real money". Which makes me think any endgame isn't going to be the utopian, governmentless, money-freedom future I keep hearing promised.

tux1968 6y ago
Not sure if it means anything, but the first thing I do when reading about the price of say some huge tunnel built in Europe is mentally convert the quoted Euro price to USD. Doesn't make the Euro any less real as a currency.
- Jtsummers 6y ago
  The fact that a European project was priced in Euros suggests that Euros are more of a currency than BTC. Converting to USD is a matter of convenience for you. But within the European economy that same project would have a near comparable EUR price in 12 months as it does today. That is not true for things priced in BTC as the value of the BTC is wildly fluctuating (though generally trending up). Please find a contemporary (don't look to someone selling alpaca wool socks in 2010 and 2011), stable priced product line in BTC. Anything that I can be confident I will pay +/- 5% of the same BTC for over a 3 month period (I'm deliberately selecting a short period, most currencies are stable for 12+ months at a time when used to price goods and services).
  - tux1968 6y ago
    This is all new to me, and I don't have any interest in BTC at all. But volatility and crazy inflation does happen in the realm of real currencies. BTC is unique because it's happening at the start of its existence rather than in the traditional death-spiral. Nor is currency speculation unique to BTC, it happens every day with traditional currencies. But maybe BTC can be forgiven for its volatility since it's such a unique and new concept? As I understand it at some point there will be no new bitcoin left to mine, and it will just be available as a store-of-value currency -- if I have the concept correct. And the early adopters will be financially rewarded for helping to get it off the ground as they spend their BTC away into circulation.

dandanua 6y ago

> not to mention completely disconnecting wealth from societal value creation. You forget to mention that a lot of early adopters are actual criminals. Yeah, go make them the rulers of the world. Let's see how this ends.

errantmind 6y ago
Do you have a citation for this?
- dandanua 6y ago
  Silk Road is just one example, there a lot more. Though, you can use logic. Money transfers without governments control is what criminals want the most.

kryptiskt 6y ago

I wouldn't worry, in a world where Bitcoin takes over, the economic logic is such that no power can be used for non-Bitcoin purposes until profitable mining has been arbitraged away. This means that the vast majority of power generation will be dedicated to hashing while the oceans rise and the environment dies. The people with the bitcoin will not find a whole lot to buy for the coins in the wasteland when it all has played out.

throwawayyy1986 6y ago
> This means that the vast majority of power generation will be dedicated to hashing while the oceans rise and the environment dies. You have no evidence for this claim, it's just a profusely fantastic image that cleaves to your political bias.